by Calculated Risk on 5/05/2022 10:13:00 AM
For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage. The delinquency rate decreased 54 basis points from the fourth quarter of 2021 and was down 227 basis points from one year ago.
“The mortgage delinquency rate dropped for the seventh consecutive quarter, reaching its lowest level since the fourth quarter of 2019,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The decrease in delinquency rates was apparent across all loan types, and especially for FHA loans. The delinquency rate for FHA loans declined 118 basis points from fourth-quarter 2021 and was down 509 basis points from one year ago.”
According to Walsh, most of the improvement in loan performance can be attributed to the movement of loans that were 90-days or more delinquent. The majority of these aged delinquencies were either cured or entered post-forbearance loan workouts.
The expiration of pandemic-related foreclosure moratoriums led to a modest increase in foreclosure starts from the record lows maintained over the past two years. At 0.19 percent, the foreclosure starts rate remains below the quarterly average of 0.41 percent dating back to 1979.
Added Walsh, “Given the nation’s limited housing inventory and the variety of home retention and foreclosure alternatives on the table across various loan types, the probability of a significant foreclosure surge is minimal. Borrowers have more choices today to either stay in their homes or sell without resorting to a foreclosure.”
This graph shows the percent of loans delinquent by days past due. Overall delinquencies decreased in Q1.
From the MBA:
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the first quarter was 0.53 percent, up 11 basis points from the fourth quarter of 2021 and down 1 basis point from one year ago. The percentage of loans on which foreclosure actions were started in the first quarter rose by 15 basis points to 0.19 percent. The foreclosure starts rate remains below the quarterly average of 0.41 percent dating back to 1979.
This sharp increase in 2020 in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus).
The percent of loans in the foreclosure process increased in Q1 with the end of the foreclosure moratoriums.