As overall delinquencies on home loans edged down during the first quarter, the share of homes in foreclosure and government-insured mortgage delinquencies rose, according to a new industry report.
In its quarterly National Delinquency Survey, the Mortgage Bankers Association of America (MBA) reported overall deliquencies down one basis point, to 4.52 percent, for the first quarter 2003, on a seasonally-adjusted basis. The organization attributed the overall decline to the fact that first quarter 2003's sample had a smaller percentage of Federal Housing Authority (FHA) loans, than the prior quarter.
According to the report, even though the overall percentage was down, each loan type included in the survey showed increased deliquencies. The survey said that FHA loans were 11.65 percent delinquent, up 20 basis points from the prior quarter, Veteran's Administration loans were 7.89 percent delinquent, up 7 basis points over fourth quarter 2002, and conventional loans were 3.10 percent delinquent, up two basis points from the prior quarter, all on a seasonally-adjusted basis.
MBA chief economist and senior vice president Doug Duncan said in the press release that deliquencies should decline in the future.
"In the second half of the year, improving economic growth and increases in employment are expected as the benefits of the tax cuts in the President's economic stimulus package, along with the ongoing economic benefits of a strong refinance market, are realized. An improved economy and job market should result in gradually declining delinquency rates," he said.
Foreclosures registered, on a seasonally-adjusted basis, 1.20 percent of all loans in first quarter 2003, up two basis points from the prior quarter, according to the survey. These loans are calculated separately from deliquencies, the survey said.
All loan types reported a rise in foreclosure, the survey said. FHA loans reported 2.90 percent in foreclosure, up 12 basis points from the prior quarter; VA loans reported 1.63 percent in foreclosure, up five basis points from fourth quarter 2002; and conventional loans reported .89 percent in foreclosure, up three basis points over the prior quarter, all on a seasonally-adjusted basis, according to the survey.
Foreclosures begun during first quarter 2003 also increased across the board for all loan types, with the overall percentage reported at .37 percent, with FHA loans reporting the highest percentage of new foreclosures, .87 percent, on a seasonally-adjusted basis, the survey said.