Tag Archives: Delinquency Rate

Data released by S&P Indices and Experian showed a decline in mortgage default rates for the fourth straight month. The agencies' index of first mortgage defaults fell to 2.33 percent in March and is down 41 percent from a year earlier. Second mortgage defaults dropped to 1.42 percent, down 49 percent over the past year. Not only has the ratio of on-time mortgage payments improved, but the report indicates consumers are making headway on their debt obligations overall, with declines in monthly default rates across all major credit lines.

US Debt Ventures, a Florida-based private equity firm, recently purchased a pool of non-performing mortgages valued at $500 million from a large financial institution. Consisting of approximately 7,000 first, second, and third liens from across the nation, the purchase is part of the company's strategy to acquire and work out large portfolios of distressed mortgages.

While mortgage defaults declined in California during the first quarter of 2011, foreclosures edged up. DataQuick reports that a total of 68,239 notices of default were recorded during the period, down nearly 16 percent from a year earlier. It was the lowest period of activity for default filings in the state since the second quarter of 2007. Homes lost to foreclosure tallied 43,052 during the first three months of this year, while short sales made up an estimated 18 percent of statewide resale activity.

Lender Processing Services (LPS) reports that the nation's mortgage delinquency rate plunged to 7.78 percent at the end of March. That figure includes loans that are at least 30 days past due but not yet in foreclosure. March's delinquency rate is down nearly 12 percent from the month before and 20 percent below a year ago. At the same time, though, the nation's foreclosure rate edged up to 4.21 percent. Altogether, LPS says there are 6,333,000 homes in the U.S. that are delinquent or in foreclosure.

Washington Governor Chris Gregoire signed the Foreclosure Fairness Act of 2011 into law Thursday. The new law goes into effect July 13. It gives homeowners facing foreclosure access to housing counselors, including meeting with the bank and an independent mediator to review options to keep their homes. Support for such mediation will be funded, at least in part, by lenders, who will pay a $250 fee for every new notice of default they file.

Ginnie Mae, which provides a guaranty on mortgage securities backed by Federal Housing Administration loans, has announced a new policy regarding the pooling of past-due loans. For single-family securities with an issue date of June 1, 2011, and after, servicers can no longer package loans that are delinquent by more than the monthly installment of principal and interest that is due on the issue date. This fall, the federal agency will also begin requiring issuers to supply new data elements, such as loan-to-value ratios and pre-modification qualities.

The delinquency rate on loans included in U.S. commercial mortgage-backed securities (CMBS) conduit/fusion transactions inched down 2 basis points in March to 9.16 percent, Moody's Investors Service reported Thursday. More significantly, the agency says the total dollar balance of delinquent loans declined in March, slipping to $56.5 billion from $56.8 billion the month before. It's the first monthly decline in the balance since October 2007.

The climb towards an expected 10 percent delinquency rate for loans held in commercial mortgage-backed securities (CMBS) has slowed, according to the latest index results from Fitch Ratings. The agency reports that late-pays retreated two basis points to end March at 8.74 percent, with delinquencies falling for four of the five major property types. At the same time, Trepp says loss severity is the lowest it's been since the company began reporting, with the majority of loans liquidated in March having losses of less than 2 percent.

Recent improvements in the job market are translating into falling subprime delinquency rates. At the same time, prices on subprime credit-default swaps (CDS) have risen for five straight months. Multiple reports on the secondary market signal growing investor appetite for subprime mortgage bonds and finance instruments like CDS, which transfer the risk of default from the bond holder to the seller of the swap. According to Fitch, subprime delinquencies are dropping sharply with cured loans up by as much as 50 percent for some vintages.

The Federal Housing Administration's Mortgagee Review Board has settled with Massachusetts mortgage lender First American Mortgage Trust (FAMT) for failing to verify whether borrowers could sustain mortgage payments prior to refinancing loans. FAMT agreed to pay $72,500, reimburse FHA for past insurance claims, and indemnify FHA's insurance fund for any claims to be paid on certain mortgages should they default within the next 60 months.