Tag Archives: Delinquency Rate

The economic environment of the last several years has added to the ranks of first-time defaulters. According to a survey conducted earlier this year by Deloitte, 11 percent of bank customers fall into this category, meaning they have experienced their first default or serious delinquency because of the recent financial crisis and recession. Deloitte contends that servicing and default management strategies should be tailored to match these customers' needs to capture what will likely be a profitable segment over time.

Default rates for both first and second mortgages increased during the month of September, according to the S&P/Experian Consumer Credit Default Indices. First mortgage delinquencies rose from 1.92 percent in August to 1.99 percent last month. Second mortgages increased from 1.27 percent to 1.32 percent. Both rates, however, are lower than their levels one year ago when the agencies cited 3.02 percent of first mortgages as delinquent and 2.14 percent of second mortgages were reported delinquent.

A recent report reveals banks that received federal funding from the Troubled Asset Relief Program (TARP) have since increased their risk level by about 10 percent. Professors from the Michigan Ross School of Business found that after receiving capital from taxpayers, banks that were bailed out shifted their credit origination toward riskier mortgages, as measured by the borrower's loan-to income ratio and high-risk indicators based on the loan rate. The study concludes that TARP recipients absorbed the riskier mortgages on the market.

How many homeowners in the United States are behind on their mortgage payments? It's 6,373,000, according to Lender Processing Services (LPS). The number is staggering, but it's actually on the decline, down from 6,397,000 as of the end of August, and 6,538,000 at the end of July. LPS has released a few high-level numbers from its mortgage performance report due out later this month, and there's evidence that servicers are pushing loans that have been languishing in non-payment status through the pipeline at a faster pace.

The delinquency rate among commercial mortgage-backed securities (CMBS) in the U.S. have been above 9 percent for nine consecutive months, according to Moody's Investors Service's Delinquency Tracker. Moody's says the rate is now 9.36 percent, up from 9.01 percent reported last month. In addition to rising at a national level, CMBS delinquencies rose in all regions except the Midwest. All property types saw an increase in past-due loans, though multifamily continues to fare the worst.

After two very sharp moves over the previous two months - a huge jump in July and a big dip in August - the delinquency rate of loans held in commercial mortgage-backed securities (CMBS) stabilized in September, according to Trepp LLC. The company says for at least one month, the reading reverted to its pattern from earlier in the year when modest bumps in the rate were the norm. Trepp reports the CMBS delinquency rate inched up just 4 basis points between August and September to 9.56 percent.

Data released by Lender Processing Services (LPS) Monday shows that foreclosure starts were up in August by 19.7 percent when compared to the previous month. However, overall foreclosure starts were down more than 12 percent from August of last year. At the same time, LPS says the number of loans in the 90-plus day delinquency bucket on which foreclosure has not been initiated has contracted to levels not seen since 2008, and the loan deterioration rate is less than half that seen in 2009.

A new quarterly survey of bank risk professionals from FICO paints a decidedly pessimistic picture of housing's future. The company describes its latest results as a reversal of the growing optimism seen in late 2010 and early 2011. The survey shows that bankers expect mortgage defaults and foreclosures to remain elevated for at least five more years, and housing prices nationally to hold below the pre-crisis levels of 2007 until the year 2020.

One in three Americans would be unable to make their mortgage or rent payment beyond one month if they lost their job, according to the results of a national survey taken in mid-September. Job loss has become the primary driver of mortgage defaults. With the state of the labor market posing one of the biggest obstacles for struggling homeowners and their lenders, a number of programs at both the national and state level have been launched to assist unemployed homeowners, but so far the expected results haven't materialized.

Data released Thursday by a federal banking regulator provides a snapshot of mortgage performance over the second quarter of this year. Both early stage and serious delinquencies increased slightly compared to the previous three-month period, as did completed foreclosures, while new modification actions fell nearly 20 percent. Perhaps the most troubling result in the report is post-modification performance. Of loans modified since the beginning of 2008, nearly half have since gone delinquent.