The fourth quarter of 2017 saw a rise in mortgage delinquencies with a seasonally adjusted rate of 5.17% of all loans outstanding at the end of the year
The fourth quarter of 2017 saw a rise in mortgage delinquencies with a seasonally adjusted rate of 5.17% of all loans outstanding at the end of the year.
The Mortgage Bankers Association says that the increase was 29 basis points compared to the end of the third quarter of 2017, and 37 basis points higher than the end of 2016.
There was no change in the share of mortgage loans on which foreclosure actions were started (0.25%) compared to the third quarter of 2017.
"The 30-day delinquency rate actually dropped by 15 basis points in the fourth quarter of 2017, as homeowners affected by Hurricanes Harvey, Irma and Maria either became current on their payments or moved to later stages of delinquency," according to Marina Walsh, MBA's Vice President of Industry Analysis.
She added that there were increases in the 60-day and 90-day delinquency rates but most states saw lower overall rates of mortgage delinquency than a year earlier.
However, FHA delinquencies were higher in all but three states suggesting factors other than the hurricanes may be stretching those borrowers’ ability to maintain payments.
"Regardless of the hurricanes, an increase in delinquencies - particularly FHA delinquencies - off historic lows is not particularly surprising given the seasoning of the loan portfolio, expected higher interest rates, declining average credit scores on new FHA endorsements since 2014 and rising debt-to-income ratios,” Walsh said. “Mitigating factors include low unemployment and increasing home equity levels that provide homeowners with more options to cure a potential default."
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.91% in the fourth quarter, up 39 basis points from the previous quarter, but still 22 basis points lower than one year ago.
