by Bill McBride on 8/09/2012 12:13:00 PM
Thursday, August 09, 2012
A few comments from Jay Brinkmann, MBA’s Chief Economist and Senior Vice President for Research and Education, on the Q2 MBA National Delinquency Survey conference call.
• The 30 day delinquency rate is back to normal (at the long term average). (This means a normal amount of loans are going delinquent each month)
• This was a slight increase in overall delinquencies (Seasonally Adjusted), and he wouldn't read too much into the increase because the seasonal adjustment might be a little off right now.
• Foreclosure inventory continues to decline. In previous quarters the decline in non-judicial state inventory was offset by increases in judicial states. The change this quarter is the non-judicial states are also a decrease in foreclosure inventory.
• There was a sharp increase in FHA foreclosure starts, and this is probably a result of the mortgage settlement.
Click on graph for larger image in graph gallery.
This graph is from the MBA and shows the percent of loans in the foreclosure process by state. Posted with permission.
The top states are Florida (13.70% in foreclosure down from 14.31% in Q1), New Jersey (7.65% down from 8.37%), Illinois (7.11% down from 7.46%), New York (6.47% up from 6.17%) and Nevada (the only non-judicial state in the top 13 at 6.09% down from 6.47%).
As Jay Brinkmann noted, California (3.07% down from 3.29%) and Arizona (3.24% down from 3.57%) are now a percentage point below the national average.
The second graph shows the percent of loans delinquent by days past due.
Loans 30 days delinquent increased to 3.18% from 3.13% in Q1. This is at about 2007 levels and around the long term average.
Delinquent loans in the 60 day bucket increased to 1.22% in Q2, from 1.21% in Q1.
The 90 day bucket increased to 3.19% from 3.06%. This is still way above normal (around 0.8% would be normal according to the MBA).
The percent of loans in the foreclosure process decreased to 4.27% from 4.39% and is now at the lowest level since Q1 2010.
A final comment: I asked Jay Brinkmann if he thought the pace of improvement for the foreclosure inventory would pickup - or stay at this rate (about 6 to 7 years back to normal). Mr Brinkmann said that this is now more of a judicial state problem, with states like New York and New Jersey having very high levels of foreclosure inventory, and non-judicial states (except Nevada) in much better shape.
Note: "MBA’s National Delinquency Survey covers 42.5 million loans on one-to-four-unit residential properties, representing approximately 88 percent of all “first-lien” residential mortgage loans outstanding in the United States. This quarter’s loan count saw a decrease of about 337,000 loans from the previous quarter, and a decrease of 1,378,000 loans from one year ago. Loans surveyed were reported by approximately 120 lenders, including mortgage banks, commercial banks and thrifts."