(March 5, 2009 Release)
Highlights
• Mortgage delinquency rates surged 89 basis points to a record high in the fourth quarter to 7.88 percent from the third quarter.
• 1.08 percent of mortgages entered foreclosure in the fourth quarter, up 1 basis point from the third quarter.
• The total delinquency rate in the fourth quarter of 2008 was 206 basis points higher than the 5.82 percent delinquency rate in the fourth quarter of 2007.
• The delinquency rate rose for both fixed rate and adjustable rate prime mortgage loans.
| MBA Mortgage Delinquency Rates | ||||
| Q4 08 | Q3 08 | Q2 08 | Q1 08 | |
| Delinquencies | ||||
| All Loans | 7.88 | 6.99 | ||
| Prime Fixed Rate | 3.9 | 3.3 | 3.1 | 2.8 |
| Prime ARM | 9.7 | 8.2 | 7.5 | 6.8 |
| Subprime Fixed Rate | 19.4 | 18.0 | 16.0 | 15.4 |
| Subprime ARM | 24.2 | 21.3 | 21.0 | 22.1 |
| Percent in Foreclosure | ||||
| All Loans | 1.08 | 1.07 | ||
| Prime Fixed Rate | 0.4 | 0.3 | 0.4 | 0.3 |
| Prime ARM | 1.7 | 1.9 | 1.9 | 1.5 |
| Subprime Fixed Rate | 2.2 | 2.2 | 2.3 | 1.8 |
| Subprime ARM | 5.4 | 6.4 | 7.1 | 6.3 |
Source: Mortgage Bankers Association
Analysis
Delinquency rates rose significantly in the fourth quarter while foreclosure rates hovered near third quarter levels. This was somewhat expected given that many states and local governments and Fannie Mae and Freddie Mac imposed moratoriums on foreclosure proceedings during the quarter. With less properties entering foreclosure, more households became delinquent on their mortgage loans, particularly in the 90 day category.
The substantial rise in delinquency rates portends unfavorably for future foreclosures (once the moratoriums are lifted) and for conditions in the housing sector in general. A deteriorating job market suggests that delinquency rates could rise into the first quarter of this year. As long as our economy remains in recession, the delinquency and foreclosure situations remain fragile, to say the least.
Leave a Reply