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Servicing News | Servicer Ranking | Delinquency Statistics
Stories about mortgage servicers, delinquency and f o r e c l o s u r e s. Coverage of servicing lawsuits and loan servicing technology.

Decade-Low for Mortgage Delinquency

Q2 non-current rate sinks 21 BPS from prior period

Aug. 11, 2016

By Mortgage Daily staff

The last time that the rate of past-due payments on residential loans was this low, the U.S. real estate market was near its peak.

As of June 30 of this year, mortgage delinquency of at least one month, including foreclosures, stood at a rate of 6.30 percent.

The non-current ratio moved lower compared to the end of the first quarter, when it closed out the period at a 6.51 percent rate.

The improvement was even more impressive versus the same point last year, when the non-current rate was 7.39 percent.

The Mortgage Bankers Association reported the numbers in its National Delinquency Survey Q2 2016. The survey reflected data on 37.7 million first liens secured by one-to-four unit properties.

Statistics from the survey are priced from $40 to $4,000 depending on the range of desired data and MBA membership status.

"Mortgage performance improved again in the second quarter primarily because of the combination of lower unemployment, strong job growth, and a continued nationwide housing market recovery," MBA Vice President of Industry Analysis Marina Walsh explained in an accompanying announcement.

Prime mortgages had a past-due rate of 3.63 percent, 18 basis points less than as of March 31 and 57 BPS better than as of mid-2015.

On subprime mortgages, the non-current rate was 22.52 percent as of mid-2016, improving from 23.04 percent three months earlier and 25.15 percent one year earlier.

The rate on mortgages insured by the Federal Housing Administration closed out the second-quarter 2016 at 10.61 percent, declining 30 BPS from the prior period and 108 BPS lower than a year prior.

Late payments on loans guaranteed by the Department of Veterans Affairs accounted for 5.50 percent of all VA mortgages. The VA rate was 5.49 percent at the end of the first quarter and 5.99 percent at the end of the second-quarter 2015.

The latest overall non-current rate reflected a seasonally adjusted 30-day rate, excluding foreclosures, of 4.66 percent. That was the lowest level since the second-quarter 2006, when the rate was 4.39 percent.

According to the S&P/Case-Shiller 20-City Home Price Index, home values peaked in 2006.

The 30-day rate was 4.77 percent as of March 31, 2016, and 5.30 percent as of June 30, 2015.

"The mortgage delinquency rate tracks closely with the nation's improving unemployment rate," Walsh stated. "In the second quarter of 2016, the mortgage delinquency rate was 4.66 percent, while the unemployment rate was 4.87 percent.

"By comparison, at its peak in the first quarter of 2010, the delinquency rate was 10.06 percent and the unemployment rate stood at 9.83 percent."

Thirty-day delinquency closed out the second-quarter 2016 at 8.65 percent in Mississippi, the highest rate of any state. Next was Louisiana's 6.91 percent, then Alabama's 6.52 percent, West Virginia's 6.21 percent and Georgia's 6.04 percent.

At just 2.54 percent, Montana had the lowest 30-day rate in the nation.

The U.S. foreclosure rate was 1.64 percent as of June 30, 2016 -- the lowest rate since the second-quarter 2007, when it landed at 1.40 percent.

No adjustments were made to the foreclosure rate for seasonality.

As of the first quarter of this year, the foreclosure rate was 1.74 percent, and it was 2.09 percent as of the same point in 2015.

New Jersey had the highest foreclosure rate as of the midpoint of this year:  5.97 percent. New York's 4.48 percent was next, then Maine's 3.08 percent, Hawaii's 2.93 percent and the District of Columbia's 2.89 percent.

In Colorado, the foreclosure rate was just 0.45 percent -- the lowest in the country.

purchase National Delinquency Survey

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