Magazine article Mortgage Banking

Delinquencies and Foreclosures Increase in Q2. (Business Alert)

Magazine article Mortgage Banking

Delinquencies and Foreclosures Increase in Q2. (Business Alert)

Article excerpt

ACCOROING TO THE MORTGAGE BANKERS Association of America's (MBA's) latest quarterly National Delinquency Survey, the percentage of homeowners paying their mortgages late increased in the second quarter of 2002. This increase occurred for all loan types, but the increase was lower for conventional loans as compared with Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans.

"The increase in delinquencies is due mainly to the increase in unemployment that occurred from the first quarter to the second quarter of this year," said Doug Duncan, MBA's chief economist. "In the first quarter, unemployment averaged 5.6 percent, but increased to an average of 5.9 percent in the second quarter. One year ago, in the second quarter of 2001, unemployment averaged 4.5 percent."

The overall seasonally adjusted delinquency rate for loans on one-to-four-unit residential properties was 4.77 percent in the second quarter of 2002, up 12 basis points from the first quarter of 2002. The percentage of loans in the process of foreclosure at the end of the quarter rose 13 basis points to 1.23 percent, and the percentage of loans in which foreclosure started during the quarter increased 3 basis points to 0.40 percent. For the second quarter of 2002, the seasonally adjusted delinquency rate for conventional loans was 3.10 percent, up 6 basis points from the previous quarter, and the rates for FHA and VA loans were 11.81 percent and 8.00 percent--up 58 and 19 basis points, respectively. …

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