Residential Mortgage Delinquencies and Foreclosure Inventory Down From Last Year, According to MBA National Delinquency Survey
|September 9, 2004|
Washington, D.C. – The second-quarter 2004 National Delinquency Survey (NDS) released today by the Mortgage Bankers Association (MBA) shows that the seasonally adjusted (SA) delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 4.43 percent at the end of the second quarter, down 54 basis points from the same quarter last year and up 10 basis points from the first quarter.
The inventory of loans in foreclosure was 1.16 percent at the end of the second quarter, a drop of 19 basis points from the same quarter last year and a drop of 11 basis points from the first quarter of this year. This rate was the lowest level since the end of 2000. The SA rate of loans entering the foreclosure process was 0.39 percent in the second quarter, up 3 basis points from the same quarter last year but down 7 basis points from the first quarter.
"The percentage of serious delinquencies, which is defined as loans 90 days or more delinquent or in the foreclosure process, continues to improve. While the total of overall delinquencies increased 10 basis points, this was almost entirely due to a rise in the number of loans that are 30 to 59 days past due. We usually see a large seasonal drop in these short-term delinquencies in the first quarter, followed by a return to more normal levels in the second quarter. We saw similar upward blips of 13 and 12 basis points in the second quarters of 2002 and 2003, respectively, which were followed by declines in the third quarters," said Douglas Duncan, MBA's chief economist and senior vice president.
"Based on the continued expansion of the economy and strong home-price growth in many regions, it is unlikely this small upward blip represents a reversal of the downward trend in delinquencies we have seen since the middle of 2001," said Duncan.
Among the other important highlights of the survey are the following:
Among prime loans, the SA delinquency rate was 2.40 percent in the second quarter, a decline of 20 basis points from last year but an increase of 14 basis points from the first quarter. The inventory of prime loans in foreclosure was 0.49 percent in the second quarter, down 4 basis points from 0.53 percent in the second quarter of 2003 and also the first quarter of 2004.
For Department of Veterans Affairs (VA) loans, the SA delinquency rate was 7.55 percent in the second quarter, down from 8.24 percent one year ago but up from 7.37 percent the previous quarter. The percentage of loans in the foreclosure process in the second quarter was 1.45 percent, down 4 basis points from one year ago and down 8 basis points from the first quarter.