European Mortgage Lending: Market Analysis

MBA Survey Reports Low Mortgage Delinquency RateMortgagePress.comforeclosure, FHA, MBA, Mortgage Bankers Association of America, NDSMortgage delinquencies nationwide improved in the first quarter of 1999, decreasing 13 basis
points to 4.13%, according to the National Delinquency Survey (NDS) released by the Mortgage
Bankers Association of America (MBA). The NDS survey, conducted since 1953, covers
approximately 23 million loans on one-to-four unit residential properties.
The delinquency situation improved for the third time in the past four quarters. The delinquency
rate has dropped 29 basis points over this period and is currently at its lowest level since the first
quarter of 1995.
A sharp drop-off in short-term interest rates from last year's levels has helped derail an
increasing trend in ARM delinquencies. Servicing portfolios are also benefitting from healthy
rates of home price appreciation, which are aiding in the offset of the greater risks associated
with increased level of high LTV loans in recent years.
The percentage of loans 30 days past due declined 9 basis points to 2.89% and the percentage of
loans 60 days past due declined 5 basis points to 0.63%. The percentage of loans 90 days or more
past due increased 1 basis point to 0.61%. On a year over year basis, the delinquency rate was 29
basis points lower.
The delinquency rate declined for each of the three loan types during the first quarter. The
delinquency rate for conventional loans was 2.71%, a drop in 9 basis points from the previous
quarter. The delinquency rate was 8.43% for FHA loans and 6.88% for VA loans, down 20 and
24 basis points, respectively.
The foreclosure situation was mixed in the first quarter of 1999. The percentage of loans in
which foreclosure started during the quarter declined 4 basis points to 0.33%. However, the
percentage of loans in foreclosure at the end of the quarter rose 5 basis points to 1.16%.
The inventory of loans in foreclosure at the end of the quarter declined for each of the three loan
types. The percentage of conventional loans in foreclosure at the end of the first quarter increased
4 basis points to 0.75%. The percentage of FHA loans in foreclosure increased 7 basis points to
2.42% and the percentage of VA loans in foreclosure rose 9 basis points to 1.97%.
Regional Data
Seasonally adjusted delinquency rates declined in three of the four census regions during the first
quarter. Delinquency rates declined 20 basis points to 4.93% in the South. For other regions, the
quarter-over-quarter delinquency rates were:
++West 3.61%, down 14 basis points
++Northeast 3.97%, down 7 basis points
++North Central 3.72%, up 7 basis points
On a year over year basis, delinquency rates were lower in each of the four census regions during
the first quarter. When compared to the first quarter of 1998, delinquency rates were:
++West down 26 basis points
++South down 26 basis points
++Northeast down 20 basis points
++North Central down 16 basis points
Foreclosure rates were lower in two of the four census regions. A comparison between the first
quarter 1999 and the same quarter in 1998 shows that foreclosure rates were:
++West 1.14%, down 16 points
++Northeast 1.49%, down 3 basis points
++South 1.15%, up 9 basis points
++North Central 0.93%, up 15 basis points