Report highlights delinquency rate increase in various stages
The Mortgage Bankers Association (MBA) has released its National Delinquency Survey for the second quarter of 2024, revealing a notable increase in mortgage delinquencies. The seasonally adjusted delinquency rate for mortgage loans on one-to-four-unit residential properties climbed to 3.97%, marking a three-basis-point rise from the previous quarter and a 60-basis-point increase from a year ago.
Marina Walsh, MBA’s vice president of industry analysis, commented on the findings. “Mortgage delinquencies increased across all product types compared to this time last year. While delinquencies are still low by historical standards, the recent increase corresponds with a rising unemployment rate, which has historically been closely correlated with mortgage performance,” she said.
The report highlights that while the percentage of loans in foreclosure slightly decreased to 0.13 percent, the overall delinquency rate saw upward movement in various stages. Specifically, the 30-day delinquency rate increased by one basis point to 2.26%, and the 60-day delinquency rate rose by three basis points to 0.70%. Conversely, the 90-day delinquency bucket decreased by one basis point to 1.01%.
Delinquencies varied by loan type, with conventional loans experiencing a two-basis-point increase to 2.64%, FHA loans rising by 21 basis points to 10.60%, and VA loans decreasing by three basis points to 4.63%. Year-over-year comparisons show substantial increases, especially for FHA loans, which rose by 165 basis points from the previous year.
Regional disparities are also evident, with Mississippi, Louisiana, Indiana, Ohio, and West Virginia reporting the highest quarterly increases in delinquency rates. Walsh noted that the increase in early-stage delinquencies, defined as loans 60 days or less past due, contributed significantly to the overall rise.
Despite the uptick in delinquencies, seriously delinquent loans – those 90 days or more past due or in foreclosure – have decreased to their lowest levels since 1984, thanks to various loan workout options that have been implemented to assist homeowners in distress.
The MBA will release its Monthly Loan Monitoring Survey July 2024 results on August 19, 2024.
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