Magazine article Mortgage Banking

Residential Mortgage Delinquencies Fall in QI

Magazine article Mortgage Banking

Residential Mortgage Delinquencies Fall in QI

Article excerpt

ACCORDING TO THE MORTGAGE BANKERS Association's (MBA's) first-quarter 2004 National Delinquency Survey (NDS), the seasonally adjusted (SA) delinquency rate for mortgage loans on one-to-four-unit residential properties fell to 4.33 percent in first-quarter 2004, down 16 basis points from 4.49 percent in fourth-quarter 2003. The foreclosure inventory percentage at the end of the first quarter was 1.27 percent, 2 basis points lower than the fourth-quarter rate of 1.29 percent, while the SA percentage of new foreclosures increased 1 basis point from 0.45 percent in the fourth quarter to 0.46 percent in the first quarter.

For prime loans, the SA delinquency rate fell 14 basis points, from 2.4 percent in the fourth quarter to 2.26 percent in the first quarter. During the first quarter, the percentage of prime loans in foreclosure registered a 2 basis point decrease, from 0.55 percent to 0.53 percent, while the percentage of prime loans that entered the foreclosure process during the quarter was 0.2 percent, unchanged from the previous quarter.

Among subprime loans, the SA delinquency rate declined 40 basis points (11.59 percent to 11.19 percent) during the first quarter. At the end of the first quarter, the foreclosure inventory percentage was 5.05 percent, down from 5.63 in the fourth quarter. The SA percentage of subprime loans in which foreclosures were started during the first quarter decreased 14 basis points.

"With the ongoing strength of the economy during the first quarter of 2004, delinquency rates continued their fall from post-recession peaks in the second quarter of 2003," said Douglas Duncan, MBA's chief economist and senior vice president. "An expectation of strong job growth for the rest of the year and continued strength in the housing market bodes well for lower delinquency and foreclosure rates in the upcoming quarters. …

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