MBA: Delinquency Rate Declines

The overall seasonally adjusted delinquency rate for home loans fell by 16 basis points to 4.33% in the first quarter, but new foreclosures have increased slightly, according to the Mortgage Bankers Association.The MBA's quarterly delinquency survey showed that, on a seasonally adjusted basis, loan performance improved in the first quarter in all categories except new foreclosures, which inched up to 0.46% from 0.45%. "With the ongoing strength of the economy during the first quarter of 2004, delinquency rates continued their fall from post-recession peaks in the second quarter of 2003," said Doug Duncan, the MBA's chief economist and senior vice president. "An expectation of strong job growth for the rest of the year and continued strength in the housing market bodes well for lower delinquency and foreclosure rates in the upcoming quarters." The MBA survey found that 2.26% of prime loans were 30 days or more late on repayment in the first quarter, down from 2.40% in the fourth quarter. The delinquency rate for loans backed by the Federal Housing Administration fell 55 bps, to 11.68%, and the rate for loans backed by the Department of Veterans Affairs fell 62 bps, to 7.37%. The MBA said 11.19% of the subprime loans in its conventional loan category were late in the first quarter, also down from the previous quarter's level. The MBA can be found online at http://www.mortgagebankers.org.