MBA Report Reveals Drop In Residential Mortgage Loan Delinquency Rate – Financial Services


To print this article, all you need is to be registered or login on Mondaq.com.

The Mortgage Bankers Association’s (“MBA”) First Quarter 2022 National Delinquency Survey
revealed that the delinquency rate for mortgage loans on
1–4-unit residential properties decreased to 4.11% of all
loans outstanding at the close of the first quarter of 2022. This
rate, according to the MBA, represents a decrease of 54 basis
points from the fourth quarter of 2021 and 227 basis points from
one year ago. Further, MBA Vice President of Industry Analysis
Marina Walsh notes that the delinquency rate dropped for the
seventh consecutive quarter, reaching its lowest level since the
fourth quarter of 2019. Walsh credits the improvement in loan
performance to the movement of loans that were ninety days or more
delinquent, with most of these delinquencies either being cured or
entering post-forbearance loan workouts.

Additionally, the MBA found that the expiration of
pandemic-related foreclosure moratoriums resulted in a modest
increase in foreclosure starts from the record lows that persisted
over the past two years. The MBA expects foreclosure starts to
remain low due to the limited housing inventory, rising prices, and
variety of available home retention and foreclosure
alternatives.

Other notable findings of the 2022 survey include:

  • Compared to last quarter, the seasonally adjusted mortgage
    delinquency rate decreased for all loans. By stage, the thirty-day
    delinquency rate decreased 6 basis points to 1.59%, the sixty-day
    delinquency rate remained unchanged at 0.56%, and the ninety-day
    delinquency bucket decreased 48 basis points to 1.96%.
  • By loan type, the total delinquency rate for conventional
    loans, those that are up to ninety days past due, decreased 55
    basis points to 3.03% over the previous quarter, the lowest level
    since the fourth quarter of 2019. The FHA delinquency rate
    decreased 118 basis points to 9.58%, the lowest level since fourth
    quarter of 2019. The VA delinquency rate decreased 38 basis points
    to 4.86%, the lowest level since first quarter of 2020. The rate
    for seriously delinquent loans, those that are ninety days or more
    past due or in foreclosure, declined to 2.39%—44 basis points
    lower than last quarter and 231 basis points lower than last year,
    its lowest point since the pandemic began.
  • The percentage of loans in foreclosure at the end of the first
    quarter was 0.53%, up 11 basis points from the fourth quarter of
    2021 and down 1 basis point from one year ago. The percentage of
    loans on which foreclosure actions were started in the first
    quarter rose by 15 basis points to 0.19%. The foreclosure starts
    rate remains below the quarterly average of 0.41% dating back to
    1979.
  • The five states with the largest quarterly decreases in their
    overall delinquency rate were: Louisiana (168 basis points), New
    Jersey (109 basis points), Indiana (105 basis points), Mississippi
    (97 basis points), and Maryland (97 basis points).

Reprinted with permission from the American Bar
Association’s Business Law Today
May Month-In-Brief: Business Regulation & Regulated
Industries.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Finance and Banking from United States

Loan Market Update

Cadwalader, Wickersham & Taft LLP

Lots of news out of the loan market. SOFR remains a focus, we have new forms from the LSTA, and what has been deemed an “existential threat” to the syndicated loan market has reared its head once

CFPB Takes Adverse Action Against Machine Learning

McGlinchey Stafford

In 2020, the CFPB blogged that Regulation B’s flexibility can be compatible with AI algorithms, because “although a creditor must provide the specific reasons for an adverse action…

Show some Love^^