Friday, February 15, 2019

MBA: "Mortgage Delinquencies Dropped to 18-Year Low in the Fourth Quarter of 2018"

by Calculated Risk on 2/15/2019 10:44:00 AM

From the MBA: Mortgage Delinquencies Dropped to 18-Year Low in the Fourth Quarter of 2018

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.06 percent of all loans outstanding at the end of the fourth quarter of 2018, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate was down 41 basis points from the third quarter of 2018 and 111 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the fourth quarter rose by two basis points to 0.25 percent.

The overall national mortgage delinquency rate in the fourth quarter was at its lowest level since the first quarter of 2000,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “What’s even more noteworthy, the delinquency rate dropped from the previous quarter and on a year-over-year basis across all loan types and stages of delinquency."

Added Walsh, “With the unemployment rate near a 50-year low, wage growth trending higher and household debt levels relative to disposable incomes at a 35-year low, homeowners are in great shape, and mortgage performance is quite strong.”
...
In relation to the third quarter of 2018, mortgage delinquencies decreased across all stages of delinquency. The 30-day delinquency rate decreased 22 basis points to 2.29 percent, the 60-day delinquency rate decreased three basis points to 0.74 percent, and the 90-day delinquency bucket decreased 15 basis points to 1.03 percent.
...
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 fourth quarter was 0.95 percent, down four basis points from the third quarter of 2018 and 24 basis points lower than one year ago. This was the lowest foreclosure inventory rate since the first quarter of 1996.
...
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.06 percent – a decrease of seven basis points from last quarter – and a decrease of 85 basis points from last year.
emphasis added
MBA Delinquency by PeriodClick on graph for larger image.

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

The percent of loans delinquent decreased in Q4 and is at the lowest rate since Q1 2000.

The percent of loans in the foreclosure process continues to decline, and is now at the lowest level since 1996.