Tag Archives: Delinquency Rate

The national delinquency rate moved against the seasonal trend and declined from the third to fourth quarter, while foreclosure starts and the foreclosure inventory rate made history with their decreases, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey. In the fourth quarter of 2012, the national delinquency rate fell to 7.09 percent, a quarterly and yearly drop of 31 and 49 basis points, respectively, the MBA reported Thursday. Foreclosure starts were down to the lowest level since the second quarter of 2007 after representing just 0.70 percent of loans in Q4.

Consumer credit default rates improved at the start of 2013, with noteworthy progress for first mortgage defaults, according to the S&P/Experian Consumer Credit Default Indices. The default rate for first mortgages dropped to 1.58 percent, down from 1.68 percent in December 2012 and 2.08 percent in January 2012. The second mortgage default rate was unchanged from December at 0.69 percent, but down sharply from 1.30 percent in January 2012.

For the first time since 2008, U.S. households stayed out of financial distress for three consecutive quarters, according to the Consumer Distress Index from CredAbility, a nonprofit counseling agency. In Q4 2012, households scored 71.8 out of 100, an increase from 70.48 in Q3 and 67.60 in Q4 2011. A score below 70 indicates a state of financial distress. Despite the recent improvements, Mark Cole, EVP for CredAbility, warned of threats that still remain.

At the end of 2012, the national mortgage delinquency rate fell nearly 14 percent over a one-year period, while more than 80 percent of metropolitan areas saw their rates decline, according to a TransUnion report. The rate of mortgages past due 60 or more days dropped to 5.19 percent in Q4 from 6.01 percent in the same quarter in 2011. ""The national mortgage delinquency rate experienced its largest yearly decline since the conclusion of the recession, though we still remain far above normal levels,"" said Tim Martin, group VP of U.S. housing at TransUnion.

During the month of January, 14,500 homeowners received permanent mortgage modifications through the Home Affordable Modification Program (HAMP), while 53,100 homeowners lost their homes to foreclosure, according to the latest Housing Scorecard from the Obama administration. At the same time, 14,500 homeowners entered into trial modifications through HAMP, and 72,500 homes entered the foreclosure process. Proprietary modifications continue to outpace HAMP. HOPE Now reported 62,200 mortgage modifications completed in January.

The national delinquency rate for commercial mortgage-backed securities (CMBS) began the year with another decline, marking the eighth consecutive month of decreases, according to Fitch Ratings. The rating agency, however, noted regional struggles in Georgia. In January, the CMBS delinquency rate fell 8 basis points, ending the month at 7.91 percent. January's CMBS delinquency rate is now at the lowest level since October 2010, when the rate stood at 7.78 percent.

The act of securitizing mortgage loans can lead to riskier lending, and ultimately more defaults, according to a study posted by the Federal Reserve Bank of New York. About 60 percent of outstanding mortgage debt in the United States is traded in the mortgage-backed securities (MBS) market, ""making the U.S. secondary mortgage market the largest fixed-income market in the world,"" according to Fed researchers. While admitting the MBS market ""is an important innovation and has several merits,"" the study finds a darker side to the market.

In a newly-released white paper, Sperlonga--a division of Matt Martin Real Estate Management that serves the mortgage industry through its homeowner association (HOA) database and services--details the monetary threat delinquent HOA accounts can pose to the industry and outlines its own solutions to the problem. HOAs can cause significant monetary losses to investors in cases of default. In 16 states and the District of Columbia, HOAs hold ""super-lien"" status, meaning their lien outweighs all other liens--even that of the investor.

While the national delinquency rate remains elevated and even increased slightly month-over-month in December, the delinquency rate ended the year 32 percent lower than the January 2010 peak, according to the December Mortgage Monitor report from Lender Processing Services (LPS). Compared to January 2012, when about 15.5 million loans were in negative equity, the number of underwater borrowers has decreased to 9.8 million, which represents a 35 percent decline.

Lender Processing Services (LPS) offered preliminary data on mortgage performance in December, revealing foreclosure inventory and delinquency rates were both down year-over-year. The foreclosure pre-sale inventory rate fell to 3.4 percent in December. The figure represents a 2 percent decrease from November and an 18 percent drop from December 2011. The delinquency rate, or loans past due 30 or more days, stood at 7.2 percent at the end of December, which is a slight 0.7 percent increase from November and a 9.1 percent decrease from a year ago.