MBA: Mortgage Delinquency Rate Continued To Decrease In Q3

Posted by Patrick Barnard on November 14, 2016 No Comments
Categories : Mortgage Servicing

The mortgage delinquency rate was about 4.52% as of the end of the third quarter, according to the Mortgage Bankers Association (MBA). That’s a decrease of 14 basis points compared with the second quarter and a decrease of 47 basis points compared with one year earlier.

Foreclosure actions were started at 0.30% of all properties with a mortgage during the third quarter – a decrease of two basis points compared with the second quarter and a decrease of eight basis points from one year earlier. It was the lowest foreclosure starts rate since the second quarter of 2000, the MBA’s data shows.

The percentage of loans in the foreclosure process at the end of the third quarter was 1.55%, down nine basis points from the previous quarter and down 33 basis points compared with one year earlier. It was the lowest foreclosure inventory rate since the second quarter of 2007.

The serious delinquency rate (90 days or more past due or in the process of foreclosure) was 2.96%, a decrease of 15 basis points compared with the previous quarter and a decrease of 61 basis points from last year. It was the lowest serious delinquency rate since the third quarter of 2007.

The foreclosure inventory rate was about 1.55%.

Marina Walsh, vice president of industry analysis for the MBA, says the ongoing reduction in the delinquency rate is due to sustained job growth and low unemployment.

“Monthly job growth averaged 206,000 jobs in the third quarter, making it the strongest quarter in 2016 thus far,” Walsh says in a statement. “The unemployment rate stayed just below five percent, and wage growth continued to strengthen. These factors helped the mortgage delinquency rate improve to 4.52 percent in the third quarter. The delinquency rate has decreased in almost every quarter since the beginning of 2013 and is below its historical average of 5.36 percent for the period from 1979 to the present.

“Additionally, the 30-day delinquency rate decreased three basis points to 2.33 percent, and the 60-day delinquency rate decreased four basis points to 0.77 percent from the previous quarter,” Walsh says. “Combined, the 30-day and 60-day delinquency rate was at its lowest level in the history of the survey, dating back to 1979.”

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