Thursday, November 17, 2011

MBA: Mortgage Delinquencies decline slightly in Q3

by Bill McBride on 11/17/2011 10:00:00 AM

The MBA reported that 12.42 percent of mortgage loans were either one payment delinquent or in the foreclosure process in Q3 2011 (delinquencies seasonally adjusted). This is down slightly from 12.87 percent in Q2 2011.

From the MBA: Delinquencies Decrease, Foreclosures Rise in Latest MBA Mortgage Delinquency Survey

The seasonally adjusted delinquency rate for mortgage loans on one-to-four-unit residential properties fell to 7.99 percent in the third quarter of 2011, according to data from the Mortgage Bankers Association’s (MBA) National Delinquency Survey. This is the lowest level recorded since the fourth quarter of 2008.

The third quarter seasonally adjusted rate of 7.99 percent is a decrease of 45 basis points from the second quarter of 2011, and a decrease of 114 basis points from one year ago. ...

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 on which foreclosure actions were started during the third quarter was 1.08 percent, up 12 basis points from last quarter and down 26 basis points from one year ago. The percentage of loans in the foreclosure process at the end of the third quarter was 4.43 percent, unchanged from the second quarter and four basis points higher than one year ago.

“While the delinquency picture changed for the better in the third quarter, the foreclosure data indicated that we are not out of the woods yet and that the issues continue to vary by geography. A closer look shows that there are different trends driving these results. The increase in the foreclosure starts rate this quarter was driven by large increases from just a few servicers, concentrated in certain ‘hardest hit’ states. For most servicers, the foreclosure starts rate was little changed over the quarter. In these ‘hardest hit’ states, the few large changes reflects the progression of delinquent loans through the foreclosure process. Outside of these states, improvement has continued, although at a slow pace due to the still-weak job market,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.
Note: 7.99% (SA) and 4.43% equals 12.42%.

MBA Delinquency by Period Click on graph for larger image in graph gallery.

This graph shows the percent of loans delinquent by days past due.

Loans 30 days delinquent decreased to 3.19% from 3.46% in Q2. This is the lowest level since early 2007.

Delinquent loans in the 60 day bucket decreased slightly to 1.30% from 1.37% last quarter. This is the lowest level since Q1 2008.

There was a decrease in the 90+ day delinquent bucket too. This decreased to 3.50% from 3.61% in Q2 2011. This is the lowest level since 2008. This decrease was probably due to the pickup in foreclosure actions.

The percent of loans in the foreclosure process was unchanged at 4.43%.

So the delinquency rate improved in each bucket (30+, 60+, 90+ days), but the percent of loans in the foreclosure process was unchanged. The key problem remains the very high level of seriously delinquent loans and loans in the foreclosure process. I'll have more later after the conference call this morning.