|Title: ||Mortgage Delinquencies Increase in Latest MBA Survey|
WASHINGTON, D.C. (August 9, 2012) — The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate
of 7.58 percent of all loans outstanding as of the end of the second quarter of 2012, an increase of 18 basis points from
the first quarter, but a decrease of 86 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA)
National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 41 basis points to 7.35 percent this quarter
from 6.94 percent last quarter. Delinquency rates typically increase between the first and second quarters of the year.
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 second quarter was 0.96 percent, unchanged from
last quarter and from one year ago. The percentage of loans in the foreclosure process at the end of the second quarter was
4.27 percent, down 12 basis points from the first quarter and 16 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 7.31 percent, a decrease
of 13 basis points from last quarter and a decrease of 54 basis points from one year ago.
The combined percentage of loans in foreclosure or at least one payment past due was 11.62 percent on a non-seasonally adjusted
basis, a 29 basis point increase from last quarter, but a 92 basis points decrease from the same quarter one year ago.
Jay Brinkmann, MBA’s Chief Economist said, “Mortgage delinquencies were up only slightly over the last quarter. Perhaps more
important than the small size of the increase, however, is the fact that it reversed the trend of fairly steady drops in delinquencies
we have seen over the last year. This is consistent with the slowdown in the economy during the first half of the year and
our stubbornly high unemployment rate. Whether this is just a temporary blip or a sign of a true change in direction for mortgage
performance will fundamentally depend on the direction of employment over the remainder of the year.”
Brinkmann continued, “While the rate of new foreclosure filings was unchanged, that rate would have fallen were it not for
the considerable jump in foreclosure starts on FHA loans. This quarter’s rate set an all-time record for FHA loans, but it
was only slightly higher than the previous high set in 2010. The jump was due to one or more large servicers of FHA loans
restarting foreclosure actions on delinquent FHA loans after the completion of the Department of Justice review and the mortgage
servicing settlement. It does not, however, represent a significant decline in FHA performance. These loans had been considered
seriously delinquent for some time and have now been moved from the 90-plus day delinquency bucket to the in foreclosure bucket,
with little net change.
“Among the states, the rate of new foreclosure actions in Maryland was the highest in the nation during the second quarter,
more than double the national average. The Maryland numbers, however, were largely driven by the resumption of foreclosures
following the servicing settlement. While Maryland had the biggest increase in foreclosures, it also had the biggest drop
in loans 90 days or more past due but not in foreclosure, an important step in working through the backlog of Maryland’s problem
“Washington had the second largest increase in foreclosures started, after the implementation of new filing requirements delayed
new foreclosures for one quarter in that state. As we have seen over the years, new state requirements have the effect of
causing large quarter-to-quarter swings in foreclosure starts but have little long-term effect.
“In terms of the percentage of loans in foreclosure, Florida continues to lead the nation at 13.7 percent, more than three
times the national average, followed by New Jersey at 7.7 percent, Illinois at 7.1 percent and New York at 6.5 percent. In
contrast, Arizona and California, two of the states hit hardest by the housing downturn, are at 3.2 percent and 3.1 percent
respectively, both more than a full percentage point below the national average.”
Change from last quarter (first quarter of 2012)
On a seasonally adjusted basis, the overall delinquency rate increased for all loan types except FHA loans. The seasonally
adjusted delinquency rate increased 17 basis points to 4.24 percent for prime fixed loans and increased 14 basis points to
9.19 percent for prime ARM loans. For subprime loans, the delinquency rate increased 52 basis points to 19.85 percent for
subprime fixed loans and increased 44 basis points to 22.60 percent for subprime ARM loans. While the delinquency rate for
VA loans also increased eight basis points to 6.65 percent, FHA loans saw a decline, with the delinquency rate decreasing
11 basis points to 11.89 percent.
The percent of loans in foreclosure, also known as the foreclosure inventory rate, decreased from last quarter to 4.27 percent.
The foreclosure inventory rate for prime fixed loans decreased 17 basis points to 2.42 percent and the rate for prime ARM
loans decreased 45 basis points from last quarter to 8.31 percent. For subprime loans, the rate for subprime ARM loans decreased
43 basis points to 21.12 percent and the rate for subprime fixed loans decreased 33 basis points to 10.15 percent. The foreclosure
inventory rate for FHA loans increased 40 basis points to 4.23 percent while the rate for VA loans decreased 18 basis points
to 2.28 percent.
The non-seasonally adjusted foreclosure starts rate decreased nine basis points for prime fixed loans to 0.53 percent, decreased
20 basis points for prime ARM loans to 1.55 percent, 15 basis points for subprime fixed to 1.98 percent, two basis points
for subprime ARMs to 3.20 percent and 17 basis points for VA loans to 0.48 percent. The foreclosure starts rate increased
57 basis points for FHA loans to 1.53 percent.
Change from last year (second quarter of 2011)
Compared with the second quarter of 2011, the foreclosure inventory rate decreased 14 basis points for prime fixed loans,
85 basis points for prime ARM loans, 86 basis points for subprime fixed, 111 basis points for subprime ARM loans, two basis
points for VA loans but increased 99 basis points for FHA loans.
Over the past year, the non-seasonally adjusted foreclosure starts rate decreased nine basis points for prime fixed loans,
27 basis points for prime ARM loans, 46 basis points for subprime fixed, 42 basis points for subprime ARM loans, increased
80 basis points for FHA loans and decreased seven basis points for VA loans.
If you are a member of the media and would like a copy of the full report, please contact Matt Robinson at firstname.lastname@example.org or 202-557-2727. If you are not a member of the media and would like to purchase the survey, please visit www.mortgagebankers.org/NDS or e-mail MBAResearch@MortgageBankers.org.
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry
that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the
association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand
homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and
fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety
of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies,
mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending
field. For additional information, visit MBA's Web site: www.mba.org.