The June ABX remittance report showed that while loss severities and delinquency rates are improving, CDRs and modification rates saw a slight increase, as reported by Bank of America Merrill Lynch analysts.
According to the month's remittance report, across the four indices, CDR rates had a mixed showing. While rates came in at generally flat for the 06-1, 07-1, and 07-2 indices, with decreases of -0.1, -0.6, and -0.3 points respectively, 06-2 rose 1.6 points to hit 12.4% .Default rates have been roughly flat, although volatile, since October and from when foreclosure issues emerged.
Meanwhile, BofA Merrill Lynch analysts pointed out that loss severities decreased an average of 1.7 points across all indices. The dips are 4.4, 1.5, and 1.1 points for the 06-1, 06-2, and 07-1 indices, to 75.8%, 85.0%, and 91.6%, respectively. They also increased 0.2 points to 87.8% for 07-2. Analysts believe that a moderation in future dips in home prices will benefit poorer severity prints.
The modification rate also saw an average increase this month of 1.02% across the four indices, as compared to the 0.96% recorded last month. The report stated that while this type of activity has slowed down recently, BofA Merrill analysts expect short-term instability resulting from ongoing Attorneys General investigations into servicer activity.
The 60+ day delinquency rates continued their decline, falling an average of 0.4 points to 42.2% on average across the indices, according to BofA Merrill Lynch analysts.