Losses for subprime asset-backed securities are on the rise.
According to a new report by Fitch ratings, subprime auto loan ABS annualized net losses hit 8.2% in January 2015, the highest levels reported since losses peaked at 9.1% in February 2009. Subprime delinquencies 60 days or more past due, rose to 4.8% in January, up 24% from January 2014. In spite of the losses, Fitch reports that the increase in delinquencies falls within initial forecasts by the company and below recession levels.
Holiday spending is credited for the spike in subprime delinquencies.
ABS losses for prime loans increased in January to 0.43%. Prime loan delinquencies 60 days or more past due rose to 0.45% of loans reported in January, up 15% from the year-ago period.