According to the Mortgage Bankers Association's National Delinquency Survey
, the delinquency rate for mortgage loans on one-to four-unit residential properties increased to a seasonally-adjusted rate of 4.36% of all loans outstanding at the end of the first quarter of 2020.
The delinquency rate was up 59 basis points from the fourth quarter of 2019 and down six basis points from one year ago. The percentage of loans on which foreclosure actions were started in the first quarter fell by two basis points to 0.19%.
“The mortgage delinquency rate in the fourth quarter of 2019 was at its lowest rate since MBA’s survey began in 1979. Fast-forward to the end of March, and it is clear the COVID-19 pandemic is impacting homeowners. Mortgage delinquencies jumped by 59 basis points–which is reminiscent of the hurricane-related, 64-basis-point increase seen in the third quarter of 2017,” said Marina Walsh, MBA’s vice president of industry analysis. “The major variances from the fourth quarter of 2019 to this year’s first quarter are tied to the increase in early-stage delinquencies for all loan types. For example, the 30-day FHA delinquency rate rose by 113 basis points, the second-highest quarterly ramp-up in the survey series. The 30-day VA delinquency rate rose by 78 basis points–the highest quarterly increase.”
The seriously delinquent rate in the first quarter decreased by nine basis points and was down 29 basis points from a year ago. The foreclosure inventory rate–the percentage of loans in the foreclosure process–was at its lowest level last quarter since 1984. Foreclosure starts were down two basis points from the previous quarter.
“Mortgage delinquencies track closely with the U.S. job market,” said Walsh. “With unemployment rising from historical lows in early 2020 to a record 14.7% in April, it is inevitable that mortgage delinquencies would increase as well. Thirty-three-and-a-half million U.S. workers applied for unemployment benefits in the past seven weeks, and with signs of economic distress continuing into the second quarter, mortgage delinquencies will likely further increase.”