The Mortgage Bankers Association (MBA) released its National Delinquency Survey, revealing that delinquency is down on mortgage loans for the first quarter of 2017, specifically on 1-4 unit residential properties. The delinquency rate was reduced by nine basis points from the prior quarter, and was six basis points lower than the previous year. The survey showed a seasonally adjusted rate of 4.71% of all outstanding mortgage loans.
“Employment growth started 2017 on strong footing, with the economy adding 216,000 jobs in January 2017 and 232,000 jobs in February. Average hourly wage growth increased 2.8% over the year, and has maintained a generally increasing trend since late 2015. These fundamentals have helped to support the performance of all loan types – whether FHA loans, VA loans or conventional loans,” commented MBA’s Vice President of Industry Analysis, Marina Walsh.
There was a slight increase in the percentage of loans on which foreclosure actions were started during the first quarter, coming in at 0.30%. This was a rise of two basis points over last quarter yet still an optimistic reduction of five basis points over one year ago. Loans in the foreclosure process at the end of the first quarter were lower, having been reported at 1.39%, a decrease of 14 basis points from the fourth quarter of last year and 35 basis points from one year ago. Loans that are 90 days or more past due (serious delinquency) or in the process of foreclosure, were reported at 2.76%, which is a decrease of 37 basis points from the previous quarter and a decrease of 53 basis points from the prior year.
Walsh added that the seasonally-adjusted FHA delinquency rate was reduced to 8.09% from 9.02% in the fourth quarter of last year, “reaching its lowest level since 1997.” The seasonal offset is made to account for the typical rise in late-pay because of higher heating costs and holiday spending. Walsh stated that, “First quarter results indicate that the increase in FHA delinquencies that we saw in the last quarter of 2016 has not been established as an ongoing trend.”
VA delinquency rates dipped down to 3.90% from 4% in the previous fourth quarter while the conventional delinquency rate remained unchanged at 4.04%.
Reportedly, foreclosure showed a slight rise for the first time since the fourth quarter of 2014, those were likely due to aged, distressed loans that had been “in the late stage-delinquency bucket by factors such as resolution attempts and state-specific requirements, before eventually going into foreclosure status.” To date, each of the 50 states and the District of Columbia saw a decrease in the 90-day or more delinquency rate.