|Title: ||Short-term Delinquencies Fall to Pre-Recession Levels, Loans in Foreclosure Tie All-Time Record in Latest MBA National Delinquency Survey|
WASHINGTON, D.C. (February 17, 2011) -- The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted
rate of 8.22 percent of all loans outstanding as of the end of the fourth quarter of 2010, a decrease of 91 basis points from
the third quarter of 2010, and a decrease of 125 basis points from one year ago, according to the Mortgage Bankers Association's
(MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate decreased 46 basis points to 8.93 percent
this quarter from 9.39 percent last quarter.
The percentage of loans on which foreclosure actions were started during the fourth quarter was 1.27 percent, down seven basis
points from last quarter and up seven basis points from one year ago. 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 fourth quarter was 4.63 percent, up 24 basis points from the third quarter of 2010 and up five basis
points from one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the
process of foreclosure, was 8.57 percent, a decrease of 13 basis points from last quarter, and a decrease of 110 basis points
from the fourth quarter of last year.
The combined percentage of loans in foreclosure or at least one payment past due was 13.56 percent on a non-seasonally adjusted
basis, a 22 basis point decline from 13.78 percent last quarter.
Jay Brinkmann, MBA's chief economist said "These latest delinquency numbers represent significant, across the board decreases
in mortgage delinquency rates in the US. Total delinquencies, which exclude loans in the process of foreclosure, are now
at their lowest level since the end of 2008. Mortgages only one payment past due are now at the lowest level since the end
of 2007, the very beginning of the recession. Perhaps most importantly, loans three payments (90 days) or more past due have
fallen from an all-time high delinquency rate of 5.02 percent at the end of the first quarter of 2010 to 3.63 percent at the
end of the fourth quarter of 2010, a drop of 139 basis points or almost 28% over the course of the year. Every state but
two saw a drop in the 90-plus day delinquency rate and the two increases were negligible."
"While delinquency and foreclosure rates are still well above historical norms, we have clearly turned the corner. Despite
continued high levels of unemployment, the economy did add over 1.2 million private sector jobs during 2010 and, after remaining
stubbornly high during the first half of 2010, first time claims for unemployment insurance fell during the second half of
the year. Absent a significant economic reversal, the delinquency picture should continue to improve during 2011, Brinkmann
Mike Fratantoni, MBA's vice president for single family research said "While the foreclosure starts rate fell during the fourth
quarter, the percentage of loans in foreclosure rose to equal the all-time high. The foreclosure inventory rate captures loans
from the point of the foreclosure referral to exit from the foreclosure process, either through a cure (perhaps through a
modification), a short sale or deed in lieu, or through a foreclosure sale. As we predicted last quarter, the percentage of
loans in the foreclosure process increased in the fourth quarter, largely due to the foreclosure paperwork issues that were
being addressed in September and October. These issues caused a temporary halt in foreclosure sales, particularly in states
with judicial foreclosure regimes, such as New Jersey, Florida, and Illinois. With fewer loans exiting the foreclosure process
through sales, the foreclosure inventory rate naturally increased, even as fewer foreclosure starts meant that fewer loans
entered the foreclosure process in the fourth quarter."
"The share of loans in foreclosure in California and Florida combined was 36.0 percent, a decrease from 37.3 percent in the
third quarter, and 39.3 percent a year ago. Over 24 percent of the loans in Florida are one payment or more past due or in
the process of foreclosure, the highest rate in the nation, followed by Nevada at over 22 percent, compared to an average
of 13.6 percent for the nation. Only eleven states saw an increase in their foreclosure start rate with Maryland seeing the
Change from last quarter (third quarter of 2010)
On a seasonally adjusted basis, the overall delinquency rate decreased for all loan types. The seasonally adjusted delinquency
rate stood at 4.51 percent for prime fixed loans, 11.23 percent for prime ARM loans, 21.26 percent for subprime fixed loans,
25.32 percent for subprime ARM loans, 12.26 percent for FHA loans, and 6.67 percent for VA loans.
The percent of loans in foreclosure, also known as the foreclosure inventory rate, increased 24 basis points to 4.63 percent,
which ties the survey's record high, last reached in the first quarter of 2010. All loan types saw an increase in the percent
of loans in foreclosure. The foreclosure inventory rate for prime fixed loans, which, make up the largest portion of the survey
(accounting for 63 percent of the loans), increased 22 basis points to 2.67 percent. This was the highest rate recorded for
prime fixed in the history of the survey. The rate for prime ARM loans increased 17 basis points from last quarter to 10.22
percent. Subprime fixed loans saw an increase of 104 basis points to 9.92 percent, which is a new record high in the survey.
The rate for subprime ARM loans increased 26 basis points to 22.04 percent, while the rate for FHA loans increased eight basis
points to 3.30 percent and the rate for VA loans increased 21 basis points to 2.35 percent.
The foreclosure starts rate decreased nine basis points for prime fixed loans to 0.84 percent, five basis points for subprime
fixed loans to 2.73 percent, and 22 basis points for FHA loans to 1.02 percent. The foreclosure starts rate increased two
basis points for prime ARM loans to 2.38 percent, 15 basis points for subprime ARM loans to 4.24 percent, and two basis points
for VA loans to 0.88 percent.
Change from last year (fourth quarter of 2009)
Given the challenges in interpreting the true seasonal effects in these data when comparing quarter to quarter changes, it
is important to highlight the year over year changes of the non-seasonally adjusted results. The non-seasonally adjusted delinquency
rate decreased for all loan types since the fourth quarter of 2009. The delinquency rate decreased 135 basis points for prime
fixed loans, 124 basis points for prime ARM loans, 284 basis points for subprime fixed loans, 152 basis points for subprime
ARM loans, 154 basis points for FHA loans, and 91 basis points for VA loans.
The non-seasonally adjusted foreclosure starts rate increased 21 basis points for prime fixed loans, 26 basis points for prime
ARM loans, and seven basis points for VA loans, but is down 47 basis points for subprime ARM loans, 26 basis points for FHA
loans, and remains unchanged for subprime fixed loans on a year over year basis.
Forty five states saw increases in the rate of foreclosure starts on a year over year basis, with the largest increases coming
in Washington, Rhode Island and the District of Columbia. The largest decreases were in Florida, Connecticut, and Maryland.
Nevada and Arizona top the rankings in terms of foreclosure starts and loans in foreclosure across most loan types.
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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 43.6 million loans on one- to four- unit residential properties,
representing approximately 88 percent of all Ã¢â‚¬Å“first-lienÃ¢â‚¬ residential mortgage loans outstanding in the United States.
This quarter's loan count saw a decrease of about 389,000 loans from the previous quarter, and decreased by 850,000 loans
from one year ago. Loans surveyed were reported by approximately 120 lenders, including mortgage bankers, commercial banks,
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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
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