Mortgage Delinquencies Rise After Historic Low
Homeowners fell at least 60 days behind in their payments at a higher rate in the fourth quarter from a historic low, while those in foreclosure continued to dwindle, the Mortgage Bankers Association reported Wednesday.
The seasonally adjusted delinquency rate stood at 4.80% on Dec. 31, up 28 basis points from Sept. 30 and up three basis points from the end of 2015, according to the Washington-based group’s quarterly National Delinquency Survey.
Credit unions remain well below the national average, according to Callahan & Associates, a Washington-based consulting firm.
“Loans past due after 60 days for first mortgages continues to trend down at credit unions, projecting to be about 0.63% delinquency rate for the fourth quarter, down from a high of 2.26% in December 2010,” said Sam Taft, director of industry analysis for Callahan & Associates.
Marina Walsh, MBA’s vice president of industry analysis, said the overall delinquency rate rose from Sept. 30 to Dec. 31 across all loan types: FHA, VA and conventional. But she noted that the third quarter rate was its lowest since 2006.
“It is not unexpected that delinquencies could eventually increase off such a low base,” Walsh said. “We continue to see strong fundamentals in the overall economy, such as rising home values and increased employment, which bodes well for the future performance of FHA, VA and conventional loans.”
The MBA survey, which covers 38 million mortgage loans on one-to-four unit residential properties, showed that foreclosure actions started on 0.28% of mortgages in the fourth quarter — its lowest rate since 1988. The fourth quarter rate fell two basis points from the previous quarter, eight basis points from a year earlier, and fell across all loan types.
The overall foreclosure rate, including mortgages with actions starting earlier, was 1.53% Dec. 31, fell two basis points from Sept. 30 and 24 basis points from a year earlier. It was the lowest foreclosure inventory rate since June 30, 2007.
New Jersey (5.42%) and New York (4.28%) continued to have the highest percentage of loans in foreclosure, but they continued to show improvement.