More Mortgage Delinquencies--What's New?
The Mortgage Bankers Association of America published their most recent statistics on mortgage delinquencies and guess what they reveal? Delinquencies have increased in pretty much all areas of the market. I won't bore you with all the statistics, but I'll try to just give you a general overview of what the main statistics show.
Not only did delinquencies increase in Q3, foreclosure rates rose as well. The seasonally adjusted (SA) total delinquency rate for mortgage loans was 6.99% for Q3, an increase of 58 basis points from 6.41% in Q2 of 2008. The total delinquency rate excludes loans in the foreclosure process. On a year-over-year basis, the delinquency rate increased 140 basis points from 5.59% at the end of the third quarter of 2007.
The percentage of loans that are already in the foreclosure process as of the end of the quarter, increased to 2.97% from 2.75%. Compared with Q3 of 2007, the foreclosure start rate was up 29 basis points from 0.78%, while the percent of loans in foreclosure was up 128 basis points from 1.69%.
The seriously delinquent rate, the percentage of loans that are 90 days or more delinquent, or in the process of foreclosure, was up from both last quarter and from last year. During the third quarter, this measure increased 6to 5.17% from 4.50%. On a year-over-year basis, the seriously delinquent rate increased 222 basis points from 2.95%.
The delinquency rate increased 41 basis points for prime loans (from 3.93% to 4.34%), 136 basis points for subprime loans (from 18.67% to 20.03%), 29 basis points for FHA loans (from 12.63% to 12.92%), and 46 basis points for VA loans (from 6.82% to 7.28%).
For adjustable rate mortgage (ARM) loans, seriously delinquent rates in Q3 increased 131 basis points for prime ARM loans (from 6.78% to 8.09% ) and increased 207 basis points for subprime ARMs (from 26.77% to 28.84%).
Since the third quarter of '07, the seriously delinquent rate increased by an astonishing 497 basis points for prime ARM loans and 1,321 basis points for subprime ARM loans.
This may be surprising, but across all loan types, the states with the highest overall delinquency rates were Mississippi (11.71%), Louisiana (10.04%), and Michigan (9.73%).
Based on foreclosure inventory, the states with the highest rates were Florida (7.32%), Nevada (5.58%), and Ohio (3.93%). Based on foreclosure starts, the three states with the highest rates were Nevada (2.47%), Florida (2.31%), and Arizona (1.88%).
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