MBA: Mortgage Delinquencies, Foreclosures Continue Decline in Q2
Mortgage delinquency and foreclosure rates continued to drop in the second quarter, with the delinquency rate reaching its lowest level since 2000, the Mortgage Bankers Association reported.
The quarterly MBA National Delinquency Survey said the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.24 percent of all loans outstanding at the end of the second quarter, the lowest level since first quarter 2000. The delinquency rate fell by 47 basis points from the previous quarter and by 42 basis points from a year ago.
Mortgage delinquencies decreased in the second quarter across all loan types–conventional, FHA and VA–on a seasonally-adjusted basis, MBA said. The conventional delinquency rate dropped to 3.47 percent from 4.04 percent in the first quarter, reaching its lowest level since 2005. The FHA delinquency rate decreased to 7.94 percent from 8.09 percent in the first quarter, reaching its lowest level since 1996. The VA delinquency rate dropped to 3.72 percent from 3.90 percent in the first quarter, reaching its lowest level since 1979.
MBA said the percentage of loans on which foreclosure actions started during the second quarter fell to 0.26 percent, a decrease of four basis points from the first quarter and six basis points from a year ago. The foreclosure inventory rate fell to its lowest level since 2007.
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter fell to 1.29 percent, down 10 basis points from the previous quarter and 35 basis points lower from a year ago.
The serious delinquency rate–the percentage of loans that are 90 days or more past due or in the process of foreclosure–fell to 2.49 percent in the second quarter, down 27 basis points from the previous quarter and 62 basis points lower than one year ago, reaching its lowest level since 2007.
“The employment outlook continues to support loan performance,” said MBA Vice President of Industry Analysis Marina Walsh. “Monthly job growth topped 200,000 jobs in June for the fourth time in the first six months of the year. Job growth in the month of July also topped 200,000. Possible factors that could influence a directional change include rising loan-to-value and debt-to-income ratios for certain product types, as affordability is stretched by tight inventory and rising home prices, and normal loan aging.”
The NDS, conducted since 1953, covers 39 million loans on one- to four- unit residential properties. Loans surveyed were reported by over 100 lenders, including mortgage bank, commercial banks and thrifts.
