Tag Archives: Delinquency Rate

Two large loan modifications helped bring down the CMBS delinquency rate, which fell 30 basis points (bps) to 7.61 percent, down from 7.91 percent in January, according to Fitch Ratings. The dollar balance of delinquent loans also sank below the $30 billion mark, a first since February 2010, Fitch stated. The dollar balance of delinquent loans also sank below the $30 billion mark, a first since February 2010, Fitch stated.

NeighborWorks America announced Thursday that borrowers who receive pre-purchase mortgage counseling and education from the organization are about one-third less likely to become seriously delinquent within the first two years of obtaining their mortgage loan compared to borrowers who do not receive counseling. Analysis from Neil Mayer and Associates and Experian found the probability of a homeowner becoming seriously delinquent within the first two years of their mortgage loan declined by about one-third for those who received pre-purchase counseling, with almost no difference between first-time and repeat buyers.

When economic times were especially shaky, commercial and multifamily mortgages stood firmly in place compared to other loan types held by banks and thrifts, according to a DataNote from the Mortgage Bankers Association. For example, during the recession, the association noted the amount of commercial and multifamily mortgage debt extended and held by financial institutions remained steady. In addition, commercial and multifamily mortgages had the lowest charge-off rates compared to other loan types.

Mortgage debt for U.S. households was roughly unchanged quarter-over-quarter, according to the Federal Reserve Bank of New York's Household Debt and Credit report. Mortgage debt stood at $8.03 trillion in Q4, making up the largest component of household debt. At the same time, overall consumer debt increased by $31 billion to $11.34 trillion, a slight 0.3 percent increase from the third quarter.

The volume of underperforming CMBS loans in the hands of special servicers fell to the lowest level since 2009, Fitch Ratings reported. At the end of 2012, the volume of specially serviced CMBS loans decreased to $70.6 billion after peaking at $91.7 billion in 2010, according to the rating agency. Fitch attributed the decrease to a significant drop in the number of loans transferred to special servicing in 2012 and the high number of loan resolutions.

Freddie Mac pulled in a net profit of $11 billion for 2012, significant increase from the annual net loss of $5.3 billion in 2011. In addition, Freddie Mac's fourth quarter net income climbed to $4.5 billion, up from $2.9 billion in the third quarter of last year. According to the company's earnings release, the increase reflects a decrease in delinquent single-family loans, improved national home prices, and a higher income tax benefit. ""It's clear from our earnings that the housing market has turned a corner and that our work to minimize legacy losses and build a strong new book of business is paying off,"" said Freddie Mac CEO Donald H. Layton in a release.

Lender Processing Services, Inc. (LPS) offered an early look at mortgage performance in January 2013 and reported a downward trend for mortgage delinquencies and foreclosures. At the end of January, the mortgage delinquency rate, which includes loans 30 days or more past due, stood at 7.03 percent, representing a 2.03 percent decline from December 2012 and an 8.35 percent decrease from January 2012. Meanwhile, the national foreclosure pre-sale inventory rate averaged 3.41 percent, falling 0.82 percent month-over-month while making a steep 19.39 percent drop year-over-year.

As Moody's rates residential mortgage-backed securities (RMBS) in post-crisis years, the firm continues to harbor some concerns about the strength of some loan pools. ""The decline of the US housing market that led to investor losses exposed limitations and flaws in many aspects of the RMBS framework,"" Moody's Investors Service stated in a report authored by VPs Kathy Kelbaugh and Yehudah Forster.

Institutions insured by the Federal Deposit Insurance Corporation recorded their second-highest annual earnings ever in 2012, according to the FDIC's Quarterly Banking Profile for the fourth quarter of 2012. High noninterest income and declining loan loss provisions contributed to the increase, according to the FDIC. Delinquencies at FDIC-insured institutions are also declining. The number of loans 90 or more days past due fell 5.5 percent in the fourth quarter. At the end of the year, 3.6 percent of loans held by the institutions were noncurrent, down from 2.86 percent a year earlier.

Following the financial crisis, a prevalence of misrepresentations in the residential mortgage backed securities (RMBS) market has exposed investors to greater risk, according to a recent report authored by university researchers Tomasz Piskorski, Amit Seru, and James Witkin. The researchers studied private-label RMBS sold in 2007 in search of misrepresentations regarding occupancy status and second liens. Overall, the researchers detected one of these two categories of misrepresentations in one out of every 10 loans.