A rise in mortgage delinquency rates in the first quarter of 2024 was highlighted by substantial year-over-year increases in payments past due for FHA and VA loans in particular.
Results of the Mortgage Bankers Association’s (MBA) latest survey indicated the delinquency rate was up six basis points from the fourth quarter of 2023 and up 38 basis points from one year ago. The delinquency rate for conventional loans increased one basis point to 2.62% over the previous quarter, while FHA loan delinquencies decreased 42 basis points to 10.39%. VA delinquencies increased by 59 basis points to 4.66% in that same time frame.
Compared to last year however, total mortgage delinquencies increased on all loan types YOY -- by 18 basis points for conventional loans, 112 basis points for FHA loans, and 68 basis points for VA loans.
“Overall mortgage delinquencies increased slightly in the first quarter of 2024, but not across all three of the major loan types. Delinquencies declined for FHA loans, were relatively flat for conventional loans, and increased for VA loans,” MBA’s Vice President of Industry Analysis Marina Walsh said. “Notably, all three loan types saw an increase in delinquencies compared to one year ago. Higher unemployment, lower personal savings, increases in property taxes and insurance, and a run-up in credit card debt and delinquency contributed to conditions that would make it tougher for some homeowners to make their mortgage payments.”
Meanwhile, the percentage of loans in the foreclosure process at the end of Q1 was 0.46%, down one basis point from Q4 2023 and 11 basis points from one year ago.
As Walsh pointed out, the delinquency rate includes loans that are at least one payment past due, but not those that have already reached the stages of foreclosure.
“At the end of 2023,” she said, “the Department of Veterans Affairs encouraged mortgage servicers to implement a foreclosure moratorium until the end of May 2024. With this pause came an increase in VA loans that remained delinquent, but not in foreclosure inventory.”
By stage, the 30-day delinquency rate increased 15 basis points over Q4 2023 to 2.25%, the 60-day delinquency rate decreased six basis points to 0.67%, and the 90-day delinquency bucket decreased three basis points to 1.02%.
There was a drop in seriously delinquent loans, which decreased six basis points for conventional loans, decreased 24 basis points for FHA loans, and remained unchanged for VA loans from the previous quarter. Compared to a year ago, the seriously delinquent rate decreased by 21 basis points for conventional loans, decreased 83 basis points for FHA loans, and decreased 25 basis points for VA loans.
The states with the largest year-over-year increases in their overall delinquency rate were: Louisiana (96 basis points), South Dakota (96 basis points), New Mexico (71 basis points), Texas (66 basis points), Georgia (56 basis points), and North Dakota (56 basis points).
