^^^
sorry i can't find the article, but i read something that stated almost 3/4 million mortgages are struggling at the brink of default; and if rates were to rise 1% (100 bp) from our current historical lows, another 500,000 would be in the same situation.
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on a similar note ...
http://www.dbrs.com/research/235316...adian-residential-mortgage-default-rates.html
Date of Release: 2010-09-17
DBRS Comments on Canadian Residential Mortgage Default Rates
DBRS has today commented on the quarterly default rates of residential mortgages in Canada and the United States as of June 30, 2010. The charts displaying these rates, which have been published as Appendix C in DBRS’s monthly Canadian Securitization Market Overview since April 2009, provide performance information on both prime and subprime residential mortgages. This analysis compares residential mortgage performance levels in Canada and the United States and will be released on a quarterly basis.
According to the Canadian Bankers Association, prime residential mortgages in Canada reported a default rate of 0.42% at the end of Q2 2010
(up from 0.29% for all of 2008 - added by poster for FYI - Number of Residential Mortgages in Arrears
Month Total Number of Mortgages Number of Mortgages in Arrears % of Arrears to Total Number of Mortgages
2008-01 3,811,089 10,100 0.27%
2008-02 3,809,140 10,376 0.27%
2008-03 3,822,749 10,438 0.27%
2008-04 3,830,155 10,068 0.26%
2008-05 3,842,289 10,250 0.27%
2008-06 3,852,207 10,319 0.27%
2008-07 3,864,025 10,420 0.27%
2008-08 3,871,038 10,866 0.28%
2008-09 3,893,801 11,265 0.29%
2008-10 3,898,269 11,459 0.29%
Source: Canadian Bankers Association
Note:Includes data from BMO (BMO), CIBC (CM), HSBC Bank Canada, National Bank of Canada, RBC Royal Bank (RY), Scotiabank (BNS), TD Canada Trust (TD) and Manulife Bank. Mortgage arrears means delinquencies of 3 months or more.),
similar to the level seen a decade ago. In comparison, U.S. prime mortgage default rates, including foreclosure, were slightly below 7% for the same period, based on the data provided by the Mortgage Bankers Association. U.S. prime mortgage defaults appeared to level off and moderate from the historical high. Nevertheless, they remained more than ten times higher than in Canada.
In Canada, default rates for subprime mortgages continued to increase, reaching 4.6% at the end of Q2 2010, based on the aggregate asset pools rated by DBRS. The increase in Canadian subprime mortgage defaults is mostly attributable to the declining asset pool, down by 60% over the last two years. U.S. subprime mortgage default rates, similar to the default rates seen among U.S. prime mortgages, also appeared to improve in 2010, coming off from the peak of over 30% at the end of 2009 to approximately 28% at the end of the second quarter. Subprime mortgage defaults in the United States are at least five times higher than in Canada.
In order to provide investors with timely and insightful analysis, DBRS monitors each rated class of all Canadian residential mortgage transactions on a monthly basis, focusing on the key performance metrics of default rate, prepayment rate, pool factor and cumulative losses.
Copies of the charts:
http://www.dbrs.com/research/235317