By Peter Ricci
The seasonally adjusted delinquency rate for mortgage loans on one-to-four unit residential properties declined by 10 percent year-over-year in 2012’s second quarter, according to the Mortgage Bankers Association’s (MBA) latest National Delinquency Survey.
Though the delinquency rate did rise slightly by 18 basis points from the first quarter, Jay Brinkmann, the MBA’s chief economist, said in a national conference call that he is not overly concerned with the increase, seeing it more connected with the slower job growth in 2012 than anything housing-related.
Delinquency Rates and the Foreclosure Radar
In addition to its findings on delinquencies, the MBA also reported some promising findings on the foreclosure front. Some key findings included:
- Older loans continue to have an impact on the delinquency rate; in fact, of the 7.58 percent of loans that are at least one payment past due, 59 percent were originated between 2005 and 2007, with just 3 percent originating after 2010.
- In addition to its mortgage delinquency data, the MBA found that serious delinquencies continue to decline, falling nearly 7 percent from last year.
- The percentage of loans in foreclosure continued to decline, falling 12 basis points from 2012’s first quarter and 16 basis points from a year ago to 4.27 percent.
- Altogether, the combined percentage of loans either in foreclosure or delinquent was 11.62 percent, a 92 basis-point decline from 2011.
Judicial vs Non-Judicial States
- State-by-state, foreclosure starts were very level, with most states in the second quarter close to the national average of less than 1 percent.
- For the percentage of loans in foreclosure, though, the divide was quite dramatic, with 13 of the top 15 states being judicial states.
- Florida continued to lead the nation with 13.7 percent of its loans in foreclosure, followed by New Jersey at 7.7 percent, Illinois at 7.1 percent and New York at 6.5 percent.
With the exception of FHA loans, which saw an increase in foreclosure starts by half a percentage point, the foreclosure start scenario is actually quite improved from a year ago. All other loan types saw a decrease in starts in the second quarter, and from its 2009 peak, subprime ARM loan starts are down by 53 percent.