According to the Mortgage Bankers Association’s (MBA) most recent National Delinquency Survey, the delinquency rate 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 of 2018.
The delinquency rate was down 54 basis points from the previous quarter and was 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,” says Marina Walsh, the MBA’s vice president of industry analysis.
The percentage of loans on which foreclosure actions were started during the first quarter was 0.28%, up three basis points from the last quarter but down two basis points from one year ago.
Notably, the percentage of loans in the foreclosure process at the end of the first quarter was 1.16%, down 3 basis points from the fourth quarter of 2017 and 23 basis points lower than one year ago. This was the lowest foreclosure inventory rate since the third quarter of 2006.
The FHA delinquency rate declined by 136 basis points over the previous quarter – the largest single-quarter decline reported for the National Delinquency Survey data series. The conventional and VA delinquency rates declined by 41 basis points and 17 basis points, respectively, from the previous quarter.
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.
Mortgage delinquencies dropped across all stages of delinquency in the first quarter of 2018 compared to the fourth quarter of 2017. The 30-day delinquency dropped 27 basis points from the previous quarter, while the 60-day and 90-day delinquency buckets dropped by 9 and 18 basis points, respectively.
The serious delinquency rate (the percentage of loans that are 90 days or more past due or in the process of foreclosure) was 2.61% in the first quarter of 2018, a decrease of 30 basis points from last quarter and a decrease of 15 basis points from last year.
Moreover, both Texas and Florida appear to be past the peak delinquencies that immediately followed the hurricanes. The non-seasonally-adjusted overall mortgage delinquency rate in Texas dropped by 171 basis points to 5.62% in the first quarter. Prior to the hurricane, in the second quarter of 2017, the overall delinquency rate for Texas was 5.05%. In Florida, the non-seasonally-adjusted overall mortgage delinquency rate on all loans dropped 230 basis points to 6.59% in the first quarter. Prior to the hurricane, in the second quarter of 2017, the overall delinquency rate for Florida was 4.07%.
Four out of the top five states with the highest 90+ day delinquency rate in the first quarter of 2018 were impacted by the hurricanes: Florida, Mississippi, Louisiana and Texas. The remaining state was New Jersey.