Increasing financial strains on households across the U.S. may be emerging in the worsening performance of private-label residential mortgage-backed securities (RMBS) that have recorded rising rates of third-quarter delinquencies across nearly all sectors.
The U.S. RMBS Performance Monitor for the fourth quarter of 2025, published by the credit rating agency Fitch Ratings using performance data available through September, shows 2020 to 2023 vintage non-QM loan pools continue to struggle, though delinquency rates are up across most sectors.
The current 30-day delinquency rate for Prime 2.0 (Fitch’s designation for post-2008 financial crisis agency-eligible loans) is 1.07%, up 0.3% annually. The 30-day delinquency rate for reperforming loans and seasoned performing loans is 8.9%, up 0.46% annually, while the 30-day delinquencies for home equity products fell 0.2% to 2.58%.
With the 30-day delinquency rate for Fitch-rated non-QM pools at 6.54% overall — 1.1% higher than a year ago — Fitch notes that the data show higher risk for limited documentation versus full documentation non-QM loans. Bank statement loans from 2023 have a 30-day delinquency rate of 10.73%, versus 6.50% for full documentation.
The 2023 non-QM vintage leads the last five origination years with a 30-day delinquency rate of 9.48% and 90-day delinquency rate of 5.10%, roughly 2.9% and 2.3% higher than a year ago, respectively. The 90-day delinquency rate for that vintage is 3.11%, up 0.82% over the year.
“These increases indicate continued collateral deterioration, with all vintages showing significant rises,” the report reads. Fitch noted in a press release that “broadening of underwriting criteria during the initial period of rising rates to compensate for the reduced activity resulted in higher [delinquency] rates over the following 12-18 months.”
Across the non-QM cohort, which Fitch refers to as Non-Prime, full documentation loans have outperformed debt-service coverage ratio (DSCR) investor-purpose loans and bank statement loans, “especially among 2022 and earlier vintages,” Fitch says.
Non-full documentation loans originated in 2023 are the worst-performing cohort, they write, with an average 30-day delinquency rate of 10.73%, which is 3.47% higher year over year.
