VMBS - A Turning Point In Sub-Prime Credit
2024-02-23 08:40:00 ET
Summary
- Recently, the percentage of past-due loans to riskier borrowers has begun to flatten, and prepayment rates for sub-prime and near-prime borrowers have fallen to nearly half their pre-pandemic levels.
- The percentage of newer sub-prime and near-prime loans at least 30 days past due - a historically good indicator of lifetime loan losses - has consistently declined since 2Q 2022.
- Though, a worsening macro environment could quickly reverse recent favorable trends in the sub- and near-prime consumer credit markets.
By Varun Surapaneni
The percentage of past-due loans to riskier consumers has begun to flatten, while newly issued paper is carrying higher interest rates. ...
A Turning Point In Sub-Prime Credit