Delinquencies across all loan types dropped quarter over quarter
Mortgage delinquencies were down in the first quarter as the impact of the September hurricanes faded, according to the National Delinquency Survey released by the Mortgage Bankers Association (MBA).
The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally-adjusted rate of 4.63% of all loans outstanding at the end of the first quarter, down 54 basis points from the previous quarter, and eight basis points lower than one year ago.
"Mortgage delinquencies decreased from the previous quarter across all loan types – conventional, VA, and in particular, FHA – as the effects of the September hurricanes dissipated," said Marina Walsh, MBA's vice president of industry analysis.
However, on a year-over-year basis, the overall mortgage delinquency rate increased by 93 basis points for FHA loans, dropped by 26 basis points for conventional loans, and increased 42 basis points for VA loans.
The first quarter posted an increase in the percentage of loans on which foreclosure actions were started by three basis points to 0.28%. The percentage declined two basis points from one year ago.
Walsh attributed the decline in first-quarter delinquencies to the strong economy, low unemployment rate, tax refunds and bonuses, and home price appreciation.
“Of course, there are offsetting factors that may put upward pressure on delinquency rates in future quarters, including: a difficult recovery for some borrowers in hurricane-impacted states; the aging of loan portfolios; higher interest rates that limit a borrower's rate-term refinance options; higher energy prices; stretching of housing affordability given limited supply; and the easing of credit overlays as mortgage market conditions have changed," she said.
