|Title: ||Delinquencies Continue to Climb in Latest MBA National Delinquency Survey|
WASHINGTON, D.C. (March 5, 2009) — The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of
7.88 percent of all loans outstanding as of the end of the fourth quarter of 2008, up 89 basis points from the third quarter
of 2008, and up 206 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency
Top Line Results
The delinquency rate breaks the record set last quarter and the quarter-to-quarter jump is the also the largest. The records
are based on MBA data dating back to 1972.
The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process
of foreclosure. The percentage of loans in the foreclosure process at the end of the fourth quarter was 3.30 percent, an
increase of 33 basis points from the third quarter of 2008 and 126 basis points from one year ago. The combined percent of
loans in foreclosure and at least one payment past due was 11.18 percent on a seasonally adjusted basis and 11.93 percent
on a non-seasonally adjusted basis. Both of these numbers are the highest ever recorded in the MBA delinquency survey.
The percentage of loans on which foreclosure actions were started during the fourth quarter was 1.08 percent, up one basis
point from last quarter and up 20 basis points from one year ago.
The percentages of loans 60 days past due, loans 90 days or more past due, and loans in foreclosure all set new record highs,
breaking records set last quarter. The percentage of loans on which foreclosure actions were started tied the record set
in the first quarter of 2008. The percentage of loans 30 days past due is still well below the record set in the first quarter
Increase in Delinquencies Show Spreading Impact of Recession
“Foreclosure inventory jumped sharply in the fourth quarter even though the rate at which loans were entering foreclosure
remained unchanged,” said Jay Brinkmann, MBA’s Chief Economist and Senior Vice President for Research and Economics. “This
is mainly attributable to various state and local moratoria on foreclosure sales, the Fannie Mae and Freddie Mac halt on foreclosure
sales announced in late November, a general reluctance by servicers to proceed with evictions in the last few weeks of December
and a slowing down caused by an overburdened legal process in some areas.”
“The rate of new foreclosures has remained essentially flat for the last three quarters of 2008. This might be seen as a good
sign for mortgage performance, but most other measures point to exactly the opposite conclusion. The percentage of loans
90 days or more past due jumped sharply in the fourth quarter. Normally servicers would have initiated foreclosure actions
on a significant portion of these loans but delayed doing so for a variety of reasons, including working on loan modifications,
complying with the guidelines of different investors, and various delays in different locales. In addition, some servicers
report a spate of borrowers running their accounts 90 days delinquent in order to qualify for certain modifications,” Brinkmann
“Subprime ARM loans and prime ARM loans, which include Alt-A and pay option ARMs, continue to dominate the delinquency numbers.
Nationwide, 48 percent of subprime ARMs were at least one payment past due and in Florida over 60 percent of subprime ARMs
were at least one payment past due.
“We will continue to see, however, a shift away from delinquencies tied to the structure and underwriting quality of loans
to mortgage delinquencies caused by job and income losses. For example, the 30-day delinquency rate for subprime ARMs continues
to fall and is at its lowest point since the first quarter of 2007. Absent a sudden increase in short-term rates, this trend
should continue because the last 2-28 subprime ARMs (fixed payment for two years and adjustable for the next 28 years) were
written in the first half of 2007. The problem with initial resets is largely behind us, although the impact of the resets
was generally overstated.
“The delinquency rates continue to climb across the board for prime fixed-rate and subprime fixed-rate loans, loans whose
performance is driven by the loss of jobs or income rather than changes in payments,” Brinkmann said.
“While California, Florida, Nevada, Arizona and Michigan continue to dominate the delinquency numbers, some of the sharpest
increases we saw last quarter in loans 90 days or more delinquent were in Louisiana, New York, Georgia, Texas and Mississippi,
signs of the spreading impact of the recession,” Brinkmann said.
Change from last quarter (third quarter of 2008)
The seasonally adjusted delinquency rate increased 72 basis points to 5.06 percent for prime loans, increased 185 basis points
to 21.88 percent for subprime loans, increased 81 basis points to 13.73 percent for FHA loans, and increased 24 basis points
to 7.52 percent for VA loans.
The percent of loans in the foreclosure process increased 30 basis points to 1.88 percent for prime loans, and increased 116
basis points for subprime loans to 13.71 percent. FHA loans saw an 11 basis point increase in the foreclosure inventory rate
to 2.43 percent, while the foreclosure inventory rate for VA loans increased 20 basis points to 1.66 percent.
The non-seasonally adjusted foreclosure starts rate increased seven basis points to 0.68 percent for prime loans and decreased
27 basis points for subprime loans to 3.96 percent. The rate was unchanged for FHA loans at 0.95 percent and increased six
basis points for VA loans to 0.65 percent.
The seriously delinquent rate, the non-seasonally adjusted percentage of loans that are 90 days or more delinquent, or in
the process of foreclosure, was up from both last quarter and from last year. This measure is designed to account for inter-company
differences on when a loan enters the foreclosure process.
Compared with last quarter, the seriously delinquent rate increased for all loan types. The rate increased 87 basis points
for prime loans to 3.74 percent, increased 355 basis points for subprime loans to 23.11 percent, increased 93 basis points
for FHA loans to 6.98 percent, and increased 67 basis points for VA loans percent to 4.12 percent.
Change from last year (fourth quarter of 2007)
On a year-over-year basis, the seasonally adjusted delinquency rate increased for all loan types. The delinquency rate increased
182 basis points for prime loans, increased 457 basis points for subprime loans, increased 68 basis points for FHA loans,
and increased 103 basis points for VA loans.
The percent of loans in the foreclosure process increased 92 basis points for prime loans and 506 basis points for subprime
loans. The rate increased nine basis points for FHA loans and 54 basis points for VA loans.
The non-seasonally adjusted foreclosure starts rate increased 25 basis points for prime loans, 25 basis points for subprime
loans, and 22 basis points for VA loans. It was unchanged for FHA loans.
The seriously delinquent rate was 207 basis points higher for prime loans and 867 basis points higher for subprime loans.
The rate also increased 98 basis points for FHA loans and 129 basis points for VA loans.
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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 45 million loans on one- to four- unit residential properties,
representing between 80 to 85 percent of all “first-lien” residential mortgage loans outstanding in the United States. Loans
surveyed were reported by approximately 120 lenders, including mortgage bankers, commercial banks, and thrifts.
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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
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