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Drilling Down Delinquency Data

Delinquency rates experienced a decline in Q2 2017 for mortgage loans on one-to-four-unit residential properties, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. At a seasonally adjusted rate of 4.24 percent of all loans outstanding, the rate was down 47 basis points from Q1 2017 and 42 basis points from Q2 2016.

Foreclosure action starts represented 0.26 percent of all loans in Q2 2017, a four basis point decrease from the previous quarter and six basis point decrease from a year ago.

“In the second quarter of 2017, the overall delinquency rate was at its lowest level since the second quarter of 2000,” said Marina Walsh, MBA’s VP of Industry Analysis. “The foreclosure inventory rate was at its lowest level since the first quarter of 2007.

The seriously delinquent rate, which combines loans that are 90 days or more past due with those loans in the process of foreclosure, dropped to a ten-year low according to Walsh. In Q2, the rate was 2.49 percent—27 basis points lower than Q1 and 62 basis points lower than Q2 of 2016.

Mortgage delinquencies decreased on a seasonally adjusted basis, including conventional (3.47 percent in Q2 2017, 4.04 percent Q1 2017), FHA (7.94 percent Q2, 8.08 percent Q1), and VA (3.72 percent Q2, 3.90 percent Q1).

“The employment outlook continues to support loan performance. Monthly job growth topped 200,000 jobs in June for the fourth time in the first six months of the year,” Walsh said. “Job growth in the month of July also topped 200,000. Possible factors that could influence a directional change include rising loan-to-value and debt-to-income ratios for certain product types, as affordability is stretched by tight inventory and rising home prices, and normal loan aging.”

About Author: Brianna Gilpin

Brianna Gilpin, Online Editor for MReport and DS News, is a graduate of Texas A&M University where she received her B.A. in Telecommunication Media Studies. Gilpin previously worked at Hearst Media, one of the nation's leading diversified media and information services companies. To contact Gilpin, email brianna.gilpin@thefivestar.com.
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