Mortgage Delinquency Rate Edged Up in Q4 2022 But Loan Performance Remained Stellar 


The U.S. mortgage delinquency rate increased to 3.96% in the fourth quarter of 2022, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

That’s up 51 basis points from the third quarter but still down 69 basis points from one year ago.

The percentage of loans on which foreclosure actions were started in the fourth quarter fell by 1 basis point to 0.14%.

“As expected, the overall national mortgage delinquency rate increased in the fourth quarter of 2022 from its previous quarterly survey low,” says Marina Walsh, CMB, vice president of industry analysis for the MBA, in a statement. “The weaker economy and ongoing inflationary pressures contributed to the uptick in delinquencies. The delinquency rate – while still low – increased from the previous quarter across all loan types and across all stages of delinquency.”

According to Walsh, for the past 15 years, mortgage delinquencies have tracked very closely with employment conditions. Despite recent indicators of resiliency in the job market, including the unemployment rate declining to 3.4% in January, the MBA still forecasts for slower hiring and rising unemployment, with the rate rising to 5.2% by the end of the year. This will likely mean further increases in mortgage delinquencies.

“Notwithstanding the fourth-quarter increase in mortgage delinquencies, the foreclosure starts rate of 0.14 percent was well below the historical quarterly average of 0.40 percent,” Walsh says. “Many distressed homeowners have loss mitigation options available to them and have accumulated home equity, which can ease financial hardship and avert foreclosure actions.”

The five states with the largest quarterly increases in their overall delinquency rate were Louisiana (77 basis points), Florida (74 basis points), Indiana (62 basis points), West Virginia (55 basis points), and Mississippi (55 basis points).

For the purposes of the survey, the MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage.

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