Strong economy eases worries over rise in mortgage delinquencies: MBA

Register now

Even though mortgage delinquencies increased on a quarter-to-quarter basis, strong overall metrics mitigate any concerns regarding future loan performance, according to the Mortgage Bankers Association.

The delinquency rate for single-family mortgages was at a seasonally adjusted rate of 4.42% of all loans outstanding. In the fourth quarter of 2018, the seasonally adjusted rate of 4.06% was the lowest in nearly 19 years. For the first quarter of 2018, the seasonally adjusted rate was 4.63%.

The year-over-year decline in the rate "is another sign of a very strong economic environment, bolstered by low unemployment and rising wage growth," Marina Walsh, MBA vice president of industry analysis, said in a press release. "Moreover, the serious delinquency rate — the percentage of loans that are 90 days or more past due or in the process of foreclosure — dropped across all loan types from the previous quarter and a year ago to its lowest overall level since the second quarter of 2006."

At the end of the first quarter, the serious delinquent rate was 1.96% on an unadjusted basis, down 10 basis points from the fourth quarter and 65 basis points from the prior year.

The first quarter's overall delinquency rate was the fourth lowest in the past 12 years, Walsh pointed out.

Among government mortgage products, Veterans Affairs-guaranteed loans had the largest rise in delinquencies, to 4.37% on a seasonally adjusted basis from 3.72% in the fourth quarter and 4.32% one year ago.

Meanwhile, Federal Housing Administration-insured loans had the largest percentage of delinquent loans, at a seasonally adjusted 8.93%, up 28 basis points from the previous quarter but down 9 basis points from one year ago.

For conventional mortgages, which includes conforming and jumbo loans, the seasonally adjusted delinquency rate of 3.46% was 27 basis points higher than the fourth quarter, but 32 basis points lower than the year prior.

For reprint and licensing requests for this article, click here.
Mortgage defaults Distressed Foreclosures GSEs Mortgage Bankers Association FHA The VA