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Serious Delinquencies Continue to Seriously Decline

Delinquent Notice BHSerious delinquencies and foreclosures continue to decrease as the housing market returns to pre-crisis levels, but these numbers still remain high relative to the early 2000s, according to The Urban Institute’s Housing Finance Policy Center’s July 2016 Chartbook.

The report shares that serious delinquencies and foreclosures continue to decrease with loans that are 90 days delinquent or in foreclosure totaling a 3.3 percent of total loans in the first quarter of 2016. This is a decrease from 4.2 percent from the previous year.

Serious delinquency rates for GSE loans are also reported to have declined. The Urban Institute states that this occurred while the legacy portfolio was resolved and the pristine, post-2009 book of business exhibited very low default rates. It also states that as of May 2016, 1.38 percent of the Fannie portfolio and 1.12 percent of the Freddie portfolio were shown to be seriously delinquent. This is a decline from 1.70 percent for Fannie and 1.58 percent for Freddie in May 2015.

The serious delinquencies for FHA and GSE single-family loans were also reported to be in a decline with the GSE delinquencies remaining higher compared to those of 2005-2007. In contrast, the report shows FHA delinquencies, which are noted to be much higher than their GSE counterparts, are currently at levels similar to those from 2005-2007. The GSE multifamily delinquencies have reduced to pre-crisis levels, despite the fact that they did not reach problematic levels even in the worst years.

Additionally, the report notes that with housing prices continuing to appreciate, residential properties in negative equity, or those with LTV greater than 100, have decreased to 8.0 percent as of Q1 2016 as a share of all residential properties with a mortgage and residential properties in near negative equity, or those with LTV between 95 and 100, comprised of 2.2 percent.