Mortgage Bonds Drop Up to 22% in June as Some 2013 Gains Erased
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U.S. home-loan bonds without government backing tumbled last month to leave several types of the debt trading at their lowest prices of the year.
Declines reached almost 22 percent in June among certain subprime-mortgage securities, according to a June 28 report by Bank of America Corp. While returns remain positive this year among subprime-backed bonds, including gains of 12.5 percent for those notes, losses in 2013 for other non-agency securities are as high as 4 percent and bonds tied to mortgages known as prime- jumbo and Alt-A loans now trade below values at the end of last year, according to the report and data from Barclays Plc.