MBA report finds residential mortgage default rate falling – Financial Services
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The Mortgage Bankers Association’s (‘MBA’) First Quarter 2022 National Delinquency Survey found that the mortgage delinquency rate for 1- to 4-unit residential properties decreased to 4.11% of all loans outstanding at the end of the first quarter of 2022. This rate, according to the MBA, represents a decrease of 54 basis points compared to the fourth quarter of 2021 and 227 basis points compared to a year ago. Additionally, Marina Walsh, vice president of industry analysis for the MBA, notes that the delinquency rate fell for the seventh consecutive quarter, reaching its lowest level since the fourth quarter of 2019. Walsh credits the improved loan performance to the movement of loans that were ninety days or more past due, with most of these arrears either being healed or entering post-forbearance lending operations.
Additionally, the MBA found that the expiration of pandemic-related foreclosure moratoriums resulted in a modest increase in foreclosure starts from record lows that have persisted over the past two years. The MBA expects foreclosures to remain low due to limited inventory of homes, rising prices and the variety of alternatives available for withholding and foreclosure of homes.
Other notable findings from the 2022 survey include:
- Compared to last quarter, the seasonally adjusted mortgage arrears rate decreased for all loans. In stages, the 30-day delinquency rate decreased by 6 basis points to 1.59%, the 60-day delinquency rate remained unchanged at 0.56%, and the 90-day delinquency band decreased by 48 basis points to 1.96%.
- By loan type, the total delinquency rate for conventional loans, those up to ninety days past due, decreased 55 basis points to 3.03% from the prior quarter, the the lowest level since the fourth quarter of 2019. The FHA default rate fell 118 basis points to 9.58%, the lowest level since the fourth quarter of 2019. The VA default rate decreased fell 38 basis points to 4.86%, the lowest level since the first quarter of 2020. The rate for severely delinquent loans, those that are ninety days or more past due or in seizure, fell to 2.39%, 44 basis points lower than last quarter and 231 basis points lower than last year, its lowest point since the start of the pandemic.
- 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 a year ago. The percentage of loans for which foreclosure actions were initiated in the first quarter increased by 15 basis points to 0.19%. The rate of foreclosure housing starts remains below the quarterly average of 0.41% dating back to 1979.
- The five states with the largest quarterly declines in their overall crime 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.
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