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Q1 Delinquency Rate Update

According to new data from the Mortgage Bankers Association’s [1] (MBA) National Delinquency Survey [2], the delinquency rate for mortgages on one-to-four residential properties decreased to a seasonally adjusted rate of 4.11% of all outstanding loans at the end of the first quarter of 2022. 

The survey asked servicers to report loans in forbearance as delinquent if payment was not made based on the terms of the mortgage. An estimated 525,000 homeowners were on forbearance plans as of March 31, 2022. 

Overall, the delinquency rate decreased 54 basis points from the fourth quarter of 2021 and was down 277 basis points from last year. 

“The mortgage delinquency rate dropped for the seventh consecutive quarter, reaching its lowest level since the fourth quarter of 2019,” said Marina Walsh [3], CMB, MBA’s Vice President of Industry Analysis. “The decrease in delinquency rates was apparent across all loan types, and especially for FHA loans. The delinquency rate for FHA loans declined 118 basis points from fourth-quarter 2021 and was down 509 basis points from one year ago.” 

Walsh continued by saying that most of the improvement in loan performance can be attributed to the movement of loans that were more than 90 days delinquent. The majority of these aged delinquencies were either cured or entered post-forbearance loan workouts. 

The expiration of pandemic-related foreclosure moratoriums led to a modest increase in foreclosure starts from the record lows maintained over the past two years. At 0.19%, the foreclosure starts rate remains below the quarterly average of 0.41% dating back to 1979. 

“Given the nation’s limited housing inventory and the variety of home retention and foreclosure alternatives on the table across various loan types, the probability of a significant foreclosure surge is minimal,” Walsh concluded. “Borrowers have more choices today to either stay in their homes or sell without resorting to a foreclosure.” 

 

Other key data from the report includes: