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“Mortgage delinquency will decrease in the first quarter of 2021”

Along Calculated risk of May 7, 2021 11:13:00 AM

From MBA: Mortgage delinquency decreased in the first quarter of 2021

Mortgage delinquency rate for 1 to 4 homes Reduced to seasonally adjusted 6.38% Of all loans issued at the end of the first quarter of 2021, according to a national delinquency survey by the Mortgage Bankers Association (MBA).

For the purpose of investigation MBA asks servicer to report overdue loan as overdue If payment was not made under the original terms of the mortgage. The delinquency rate decreased by 35 basis points from the fourth quarter of 2020 and increased by 202 basis points from a year ago.

Marina Walsh, vice president of industrial analytics at the MBA, said: “Mortgage arrears are closely linked to the US unemployment rate, which has fallen since last year’s surge, and many households appear to be doing better.”

Walsh said that in the history of the MBA’s national delinquency survey, delinquency rates have never dropped so significantly in such a short period of time. Mortgage delinquency peaked at 8.22% in the second quarter of 2020, dropping 184 basis points to 6.38% within three-quarters. in addition, The earliest delinquency in the quarter (30 and 60 days delinquency combined) fell to the lowest level since the survey began in 1979...
Emphasis added

Click the graph to see the enlarged image.

This graph shows the percentage of overdue loans by days overdue. Overall delinquency decreased in the first quarter.

The decline was 30-day and 60-day buckets, and foreclosures. 90 delinquency increased slightly (mainly delinquent loans).

From MBA:

Compared to the previous quarter, the seasonally adjusted mortgage delinquency rate decreased for all loan balances. For each stage, the 30-day delinquency rate decreased by 32 basis points to 1.46%, the lowest rate since the survey began in 1979. The 60-day delinquency rate fell 10 basis points to 0.67%, the lowest rate since the second quarter of 2000. .. 90-day delinquent buckets increased 7 basis points to 4.25%.

The delinquency rate includes loans that are overdue at least once, but does not include loans that are in the process of being foreclosed. The percentage of loans foreclosed in the first quarter increased by 1 basis point to 0.04 percent. The share of loans in the foreclosure process at the end of the first quarter was 0.54%, down 2 basis points from the fourth quarter of 2020 and 19 basis points from a year ago. This is the lowest foreclosure inventory rate since the first quarter of 1982.

This surge in buckets over the last 90 days was due to a tolerant loan. (Included as overdue, but not reported to the credit bureau).

The proportion of loans in the foreclosure process has declined further, the lowest level since 1982.

“Mortgage delinquency will decrease in the first quarter of 2021”

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