The mortgage finance system is posting improved performance as the rate of new delinquencies across all sectors trends down, according to Fitch Ratings.

Fitch's Delinquency Roll Rate Index continued falling - down 2% in the second quarter, 2.4% in the first quarter and 2.2% from a year earlier. The index highlights performance trends in various sectors, including both legacy and new issue residential mortgage-backed securities.

Sean Nelson, a director at Fitch, said the improved roll rates are led most notably by an increase in home prices, steady job growth and positive selection from borrowers remaining in the mortgage pools.

"One area of concern remains prime mortgage loans originated before 2005, which continue to struggle due to concentrations of adversely selected borrowers."

In general, delinquency rates are lower as a result of borrowers receiving tax refunds. With that in mind, Fitch still expects long-term improvement even when taking seasonality into account.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry