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Thursday, November 10, 2022

MBA: "Mortgage Delinquencies Decrease to New Survey Low in the Third Quarter of 2022"

by Calculated Risk on 11/10/2022 11:33:00 AM

From the MBA: Mortgage Delinquencies Decrease to New Survey Low in the Third Quarter of 2022

The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 3.45 percent of all loans outstanding at the end of the third quarter of 2022, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage. The delinquency rate was down 19 basis points from the second quarter of 2022 and down 143 basis points from one year ago.

“For the second quarter in a row, the mortgage delinquency rate fell to its lowest level since MBA’s survey began in 1979 – declining to 3.45 percent. Foreclosure starts and loans in the process of foreclosure also dropped in the third quarter to levels further below their historical averages,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The relatively small number of seriously delinquent homeowners are working with their mortgage servicers to find foreclosure alternatives, including loan workouts that allow for home retention.”
emphasis added
MBA Delinquency by PeriodClick on graph for larger image.

This graph shows the percent of loans delinquent by days past due.  Overall delinquencies decreased in Q3 to a record low.

From the MBA:
Compared to second-quarter 2022, the seasonally adjusted mortgage delinquency rate decreased for all loans outstanding to 3.45 percent, the lowest level in the history of the survey dating back to 1979. By stage, the 30-day delinquency rate remained unchanged at 1.66 percent, the 60-day delinquency rate increased 4 basis points to 0.53 percent, and the 90-day delinquency bucket decreased 22 basis points to 1.27 percent.
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. For much of the last two years, foreclosure moratoria were in place, which kept these numbers artificially low. ... The percentage of loans in the foreclosure process at the end of the third quarter of 2022 was 0.56 percent, down 3 basis points from the second quarter of 2022, and 10 basis points higher than one year ago.
This sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).

The percent of loans in the foreclosure process increased year-over-year in Q3 with the end of the foreclosure moratoriums.