MBA: Delinquencies Fell in 3Q

The overall delinquency rate for home loans declined by 11 basis points to 4.66% in the third quarter, according to the Mortgage Bankers Association of America.The MBA's quarterly delinquency survey, which now tracks subprime loans in addition to prime conventional loans and loans backed by the government, showed improved loan performance in all categories. The MBA survey found that 3.06% of conventional loans were 30 days or more late on repayment in the third quarter, down from 3.20% in the second quarter. The delinquency rate for loans backed by the Federal Housing Administration fell 19 bps, to 11.62%, and the rate for loans backed by the Department of Veterans Affairs also fell 19 bps, to 7.81%. While warning that its subprime database is not yet representative of the entire sector, the MBA said 14.28% of the subprime loans in its conventional loan category were late in the third quarter, also down from the previous quarter. MBA chief economist Doug Duncan told reporters that the subprime delinquency rate will likely move "much lower" as additional subprime lenders are recruited to participate in the survey, because the current database includes several lenders that specialize in servicing particularly high-risk and high-delinquency loans. The MBA can be found online at http://www.mbaa.org.