The quarterly report from the Mortgage Bankers Association (MBA) based on its National Delinquency Survey seems like old times. MBA reports that most, if not all, of its performance data is back to pre-crisis levels.
The mortgage delinquency rate, for example, was at its lowest since the second quarter of 2000, 4.24 percent. That reflected a 47-basis point (bp) reduction since the first quarter and was 42 bps lower than a year earlier.
Delinquencies retreated across all loan types during the quarter, and within those types were several even more impressive historic markers. VA delinquencies were at their lowest level since 1979 (3.90 percent) and the last time the FHA rate had been lower than 7.94 percent was in 1996. The Conventional rate posted its best number, 3.47 percent, since 2005.
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The serious delinquency rate includes loans that are 90 days or more past due, including those in foreclosure. The rate was 2.49 percent in the second quarter, down 27 basis points from the previous quarter, 62 basis points lower than one year ago, and a ten-year low. Within that rate, loans in the process of foreclosure had a rate of 1.29 percent, a number that retreated by 10 bps from the previous quarter, was 35 bps lower than one year earlier, and also a ten-year low.
Foreclosure starts also declined. They were down 4 bps from the first quarter and 6 from the second quarter of 2016.
Marina Walsh, MBA's Vice President of Industry Analysis, offered the following commentary on the survey results: "The employment outlook continues to support loan performance. Monthly job growth topped 200,000 jobs in June for the fourth time in the first six months of the year. Job growth in the month of July also topped 200,000. Possible factors that could influence a directional change include rising loan-to-value and debt-to-income ratios for certain product types, as affordability is stretched by tight inventory and rising home prices, and normal loan aging."