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Mortgage Delinquency Down, Outstandings Grow

Mortgage News

Mortgage Daily

                                                 May 9, 2018

Over the past year, residential loan performance improved and mortgages outstanding expanded. But as quarterly lending started to slow, average originated loan amounts have fallen.

As of March 31 of this year, 53.1 million single-family loans were outstanding that had a collective unpaid principal balance estimated at $10.751 billion.

America’s estimated book of business was
53.2 million loans for $10.732 billion at the end of last year and 52.8 million loans for $10.390 billion at the same point last year.

The estimates were based on data reported Tuesday by TransUnion and previously reported figures from the
Chicago-based firm.

Delinquency of at least 60 days ended the first quarter of this year at 1.74 percent. The rate tumbled 12 basis points from Dec. 31, 2017, and was 33 BPS better than as of March 31, 2017.

On a year-over-year basis, delinquency has declined for 19 consecutive quarters.

“While reported delinquencies have dropped, the hurricanes in Q3 of last year have driven an interesting dynamic related to the number accounts in forbearance, which are typically reported as current to credit reporting agencies regardless of their actual payment status,” the report stated. “Houston, Miami and Tampa were the MSAs most impacted by the hurricanes. In those areas, only 1,800 out of 2.36 million active mortgages were reported to be in some form of forbearance status in Q2 2017, prior to the hurricanes. That number skyrocketed to 164,000 mortgages in some form of forbearance status by the end of Q1 2018.”

TransUnion reports mortgage originations on a one-quarter lag. During the final three months of last year, 1.8 million loans were originated for $413 billion, off from 1.9 million loans for $434 billion in the third quarter and 2.08 million loans for $490 billion in the fourth-quarter 2016.

Full-year 2017 originations amounted to 7.09 million loans for $1.601 trillion, retreating from 7.77 million loans closed for $1.802 trillion in 2016.

“While balances rose in aggregate for the year, average new mortgage loan balances declined from $235,361 in Q1 2017 to $229,538 in Q1 2018, likely a result of declining refinancing activity and a lower share of super prime loans,” TransUnion said. “That shift in new origination mix pushed subprime and near-prime originations to 16.0 percent in Q4 2017 from 14.4 percent in Q4 2016.”

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