Thursday, August 24, 2017

MBA: Mortgage Delinquency Rate in Q2 at Lowest Level Since 2000

by Bill McBride on 8/24/2017 11:30:00 AM

From the MBA: Delinquencies and Foreclosures Continue to Decline in Q2 2017

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 of 2017.  The delinquency rate was down 47 basis points from the previous quarter, and was 42 basis points lower than one year ago, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey.

The percentage of loans on which foreclosure actions were started during the second quarter was 0.26 percent, a decrease of four basis points from the previous quarter, and six basis points lower than 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 in the foreclosure process at the end of the second quarter was 1.29 percent, down 10 basis points from the previous quarter and 35 basis points lower than one year ago.

The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.49 percent in the second quarter, down 27 basis points from the previous quarter and 62 basis points lower than one year ago.

Mortgage delinquencies decreased in the second quarter of 2017 across all loan types - conventional, FHA and VA - on a seasonally-adjusted basis.  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.

Marina Walsh, MBA's Vice President of Industry Analysis, offered the following commentary on the survey results:

"In the second quarter of 2017, the overall delinquency rate was at its lowest level since the second quarter of 2000.  The foreclosure inventory rate was at its lowest level since the first quarter of 2007. In addition, the seriously delinquent rate, which combines loans that are 90 days or more past due with those loans in the process of foreclosure, dropped to a ten-year low.
emphasis added
MBA Delinquency by PeriodClick on graph for larger image.

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

Note that the overall delinquency rate is the lowest since 2000.

The percent of loans 30 and 60 days delinquent decreased in Q2, and is below the normal historical level.

The 90 day bucket decreased in Q2, but remains a little elevated.

The percent of loans in the foreclosure process continues to decline, and is close to normal levels.