|Title: ||Delinquencies Continue to Climb in Latest MBA National Delinquency Survey|
WASHINGTON, D.C. (November 19, 2009) — The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of
9.64 percent of all loans outstanding as of the end of the third quarter of 2009, up 40 basis points from the second quarter
of 2009, and up 265 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency
Survey. The non-seasonally adjusted delinquency rate increased 108 basis points from 8.86 percent in the second quarter of
2009 to 9.94 percent this quarter.
Top Line Results
The delinquency rate breaks the record set last quarter. 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 third quarter was 4.47 percent, an increase
of 17 basis points from the second quarter of 2009 and 150 basis points from one year ago. The combined percentage of loans
in foreclosure or at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded
in the MBA delinquency survey.
The percentage of loans on which foreclosure actions were started during the third quarter was 1.42 percent, up six basis
points from last quarter and up 35 basis points from one year ago.
The percentages of loans 90 days or more past due, loans in foreclosure, and foreclosures started all set new record highs.
The percentage of loans 30 days past due is still below the record set in the second quarter of 1985.
Increases Driven by Prime and FHA Loans
“Despite the recession ending in mid-summer, the decline in mortgage performance continues. Job losses continue to increase
and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP.
Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of
seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42
percent,” said Jay Brinkmann, MBA’s Chief Economist.
“Prime fixed-rate loans continue to represent the largest share of foreclosures started and the biggest driver of the increase
in foreclosures. 33 percent of foreclosures started in the third quarter were on prime fixed-rate and loans and those loans
were 44 percent of the quarterly increase in foreclosures. The foreclosure numbers for prime fixed-rate loans will get worse
because those loans represented 54 percent of the quarterly increase in loans 90 days or more past due but not yet in foreclosure.
“The performance of prime adjustable rate loans, which include pay-option ARMs in the MBA survey, continue to deteriorate
with the foreclosure rate on those loans for the first time exceeding the rate for subprime fixed-rate loans. In contrast,
both subprime fixed-rate and subprime adjustable rate loans saw decreases in foreclosures.
“The foreclosure rate on FHA loans also increased, despite having a large increase in the number of FHA-insured loans outstanding.
The number of FHA loans outstanding has increased by about 1.1 million over the last year. This increase in the denominator
depresses the delinquency and foreclosure percentages. If we assume these newly-originated loans are not the ones defaulting
and remove the big denominator increase from the calculation results, the foreclosure rate would be1.76 percent rather than
1.31 percent reported.
“Once again the states of Florida, California, Arizona and Nevada have a disproportionate share of the mortgage problems.
They had 43 percent of all foreclosures started in the third quarter, down only slightly from 44 percent both last quarter
and the third quarter last year. They had 37 percent of the nation’s prime fixed-rate loan foreclosure starts and 67 percent
of the prime ARM foreclosure starts. As of the end of September, 25 percent of the mortgages in Florida were at least one
payment past due or in foreclosure.
“The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve. First, it is unlikely
the employment picture will get better until sometime next year and even then jobs will increase at a very slow pace. Perhaps
more importantly, there is no reason to expect that when the economy begins to add more jobs, those jobs will be in areas
with the biggest excess housing inventory and the highest delinquency rates. Second, the number of loans 90 days or more
past due or in foreclosure is now a little over 4 million as compared with 3.9 million new and previously occupied homes currently
for sale, although there is likely some overlap between the two numbers. The ultimate resolution of these seriously delinquent
loans will put added pressure on the hardest hit sections of the country.”
Change from last quarter (second quarter of 2009)
The seasonally adjusted delinquency rate increased 43 basis points for prime loans (from 6.41 percent to 6.84 percent), 107
basis points for subprime loans (from 25.35 percent to 26.42 percent), and two basis points for VA loans (from 8.06 percent
to 8.08 percent). The delinquency rate for FHA loans decreased six basis points (from 14.42 percent to 14.36 percent). The
non-seasonally adjusted delinquency rate for FHA loans however, increased 134 basis points this quarter (from 13.70 percent
to 15.04 percent).
The non-seasonally adjusted percentage of loans in the foreclosure process increased 20 basis points for prime loans (from
3.00 percent to 3.20 percent), and increased 30 basis points for subprime loans (from 15.05 percent to 15.35 percent). FHA
loans saw a 34 basis point increase in foreclosure inventory rate (from 2.98 percent to 3.32 percent), while the foreclosure
inventory rate for VA loans increased 22 basis points (from 2.07 percent to 2.29 percent).
The non-seasonally adjusted foreclosure starts rate increased 13 basis points for prime loans (from 1.01 percent to 1.14 percent),
increased 16 basis points for FHA loans (from 1.15 percent to 1.31 percent), and increased 19 basis points for VA loans (from
0.68 percent to 0.87 percent). This rate decreased 37 basis points for subprime loans (from 4.13 percent to 3.76 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 rate increased 82 basis points for prime loans (from 5.44 percent to 6.26 percent), 216 basis
points for subprime loans (from 26.52 percent to 28.68 percent), 89 basis points for FHA loans (from 7.78 percent to 8.67
percent), and 37 basis points for VA loans (from 4.69 percent to 5.06 percent).
Change from last year (third quarter of 2008)
The seasonally adjusted delinquency rate increased 250 basis points for prime loans, 639 basis points for subprime loans,
144 basis points for FHA loans, and 80 basis points for VA loans.
The foreclosure inventory rate increased 162 basis points for prime loans, 280 basis points for subprime loans, 100 basis
points for FHA loans, and 83 basis points for VA loans.
The foreclosure starts rate increased 35 basis points overall, 53 basis points for prime loans, 36 basis points for FHA loans,
and 28 basis points for VA loans. The starts rate decreased 47 basis points for subprime loans.
The seriously delinquent rate increased 339 basis points for prime loans, 912 basis points for subprime loans, 262 basis points
for FHA loans, and 161 basis points for VA loans.
If you are a member of the media and would like a copy of the survey, please contact Carolyn Kemp at firstname.lastname@example.org or Melissa Key at email@example.com. If you are not a member of the media and would like to purchase the survey, please call (800) 348-8653.
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.