WASHINGTON, D.C. – (RealEstateRama) – The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.53 percent of all loans outstanding at the end of the second quarter of 2019, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The foreclosure inventory rate, the percentage of loans in the foreclosure process, was 0.90 percent last quarter – the lowest since the fourth quarter of 1995.
The delinquency rate was up 11 basis points from the first quarter of 2019 and 17 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the second quarter rose by two basis points to 0.25 percent.
“The unemployment rate remains quite low, but the national mortgage delinquency rate in the second quarter rose from both the first quarter and one year ago. The economy is slowing, and this poses the risk of further increases in delinquency rates,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “Across loan types, the FHA delinquency rate posted the largest variance, increasing 29 basis points from last quarter and 52 basis points from a year ago.”
Added Walsh, “Heavy rains and flooding, extreme heat, and tornadoes in certain states during the spring, may have also contributed to the increase in the delinquency rate, as some borrowers likely faced disruption or hardship.”
Key findings of MBA’s Second Quarter of 2019 National Delinquency Survey:
- Compared to last quarter, the seasonally adjusted mortgage delinquency rate increased for all loans outstanding. By stage, the 30-day delinquency rate increased four basis points to 2.62 percent, the 60-day delinquency rate remained unchanged at 0.81 percent, and the 90-day delinquency bucket increased seven basis points to 1.10 percent.
- By loan type, the total delinquency rate for conventional loans increased 15 basis points to 3.61 percent over the previous quarter. The FHA delinquency rate increased 29 basis points to 9.22 percent, while the VA delinquency rate decreased by 13 basis points to 4.24 percent over the previous quarter.
- On a year-over-year basis, total mortgage delinquencies increased for all loans outstanding. The delinquency rate increased by 16 basis points for conventional loans, increased 52 basis points for FHA loans, and increased 27 basis points for VA loans from the previous 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 in the foreclosure process at the end of the second quarter was 0.90 percent, down two basis points from the first quarter of 2019 and 15 basis points lower than one year ago. This is the lowest foreclosure inventory rate since the fourth quarter of 1995.
- The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was at 1.95 percent – a decrease of 1 basis point from last quarter and a decrease of 35 basis points from last year. The serious delinquency rate was unchanged for conventional loans, down 2 basis points for FHA loans, and down 6 basis points for VA loans from the previous quarter. Compared to a year ago, the serious delinquency rate decreased by 35 basis points for conventional loans, 43 basis points for FHA loans and 22 basis points for VA loans.
- The five states with the largest increases in their overall delinquency rate were affected by weather-related issues. This may have resulted in an increase in delinquencies over the previous quarter of the following magnitude: West Virginia (86 basis points), Mississippi (81 basis points), Alabama (73 basis points), Indiana (73 basis points), and New Mexico (65 basis points).
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The above data were obtained in cooperation with the Mortgage Bankers Association (MBA), which produces the National Delinquency Survey (NDS). The NDS, which has been conducted since 1953, covers 38 million loans on one- to four- unit residential properties. Loans surveyed were reported by over 100 lenders, including mortgage bank, commercial banks, and thrifts.