WASHINGTON – May 13, 2016 – (RealEstateRama) — The delinquency rate for mortgage loans on one-to-four-unit residential properties remained unchanged from the previous quarter at a seasonally adjusted rate of 4.77 percent of all loans outstanding at the end of the first quarter of 2016. This was the lowest level since the third quarter of 2006. The delinquency rate was 77 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 first quarter was 0.35 percent, a decrease of one basis point from the previous quarter, and down 10 basis points from one year ago. This foreclosure starts rate was at the lowest level since the second quarter of 2000.
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 first quarter was 1.74 percent, down three basis points from the previous quarter and 48 basis points lower than one year ago. This was the lowest foreclosure inventory rate seen since the third quarter of 2007.
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 3.29 percent, a decrease of 15 basis points from previous quarter, and a decrease of 95 basis points from last year. This was the lowest serious delinquency rate since the third quarter of 2007.
Marina Walsh, MBA’s Vice President of Industry Analysis, offered the following commentary on the survey:
“The delinquency rate of 4.77 percent has returned to typical pre-recession levels and is lower than the historical average of 5.4 percent for the time period from 1979 to the first quarter of 2016.
“The rate at which new foreclosures were initiated in the first quarter was 0.35 percent, the lowest in 16 years, and 10 basis points below the historical average of 0.45 percent. A total of 28 states and Washington, DC either saw decreases or no change in the foreclosure starts rate this quarter, while the remaining 22 states experienced increases in the foreclosure starts rate. Only two of these 22 states have strictly non-judicial processes in place.
“Continuing a consistent downward trend that began in the second quarter of 2012, the foreclosure inventory rate fell again in the first quarter of 2016 to 1.74 percent, a decrease of three basis points from the previous quarter. Of the 50 states and Washington, DC, 44 states either had no change or saw declines in the foreclosure inventory rate.
“While the overall foreclosure inventory rate for the first quarter was considerably lower than the peak of 4.64 percent at the worst of the crisis, it was still above the average of 1.5 percent for the time period between 1979 and the first quarter of 2016. The good news is that foreclosure inventory rates continued to decline in both judicial and non-judicial states this quarter. However, about two-thirds of the twenty states with foreclosure inventory rates above the national average were judicial states.”
NDS Note: Starting in the first quarter of 2016, we combined all non-government loans into a single conventional loan category. Conventional loans, which make up 78 percent of loans serviced, had a two basis point increase in delinquency rate, a one basis point increase in the percent of loans in foreclosure, and a two basis point decrease in the foreclosure starts rate. Historical data with the split of conventional, FHA and VA loans is now available. Figure 2 displays key results of this new series.
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Data are from a proprietary paid subscription service of MBA and are provided to the media as a courtesy, solely for use as background reference. No part of the data may be reproduced, stored in a retrieval system, transmitted or redistributed in any form or by any means, including electronic, mechanical, photocopying, recording or otherwise. Permission is granted to news media to reproduce limited data in text articles. Data may not be reproduced in tabular or graphical form without MBA’s prior written consent.
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 39 million loans on one- to four- unit residential properties, representing approximately 85 percent of all “first-lien” residential mortgage loans outstanding in the United States. Loans surveyed were reported by over 100 lenders, including mortgage bank, commercial banks, and thrifts.
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