Barclays Capital said that in the upcoming February remits, analysts from the firm expect delinquencies to generally increase as a result of the recent deterioration of roll rates and lower day count. These projections were made in a recent report.
However, despite this, favorable seasonal effects should keep the growth of delinquencies slower than those of last month.
For instance, analysts project serious delinquencies to rise by 40 to 50 basis points for the '06
series, and 140 to 190 basis points for the 07 series, a slightly smaller rise than last month.
With two less business days in February compared with the previous month as well as a smaller REO bucket, analysts believe CDRs should slightly drop by 20 to 50 basis points for the '06 series and post a moderate rise of 20 to 100 basis points for the '07 series this month.
Inspite of the fewer days, voluntary prepays should benefit from the rate rally and remain comparatively unchanged on 06-1 and 07-1 series, and post slight increases on 06-2 and 07-2 series as these approach 3/27 and 2/28 first rate resets, according to Barclays analysts.
Meanwhile, the nationwide REO inventories dropped slightly by a projected 0.8%, to 838,100 homes in December. They expect a flat to 1.0% increase in January.