The Mortgage Bankers Association released their quarterly mortgage deliquency suvery today. While much of the media is focusing on the slight increase in overall deliquency during the 2nd quarter of 2011, which rose to 8.44 percent of all oustanding loans, this is only part of the picture.
This deliquency rate remains significantly lower than the 2nd quarter of 2010: while deliquency rose 12 basis points over 1st quarter 2011, it is 144 basis points lower than the 2nd quarter of last year. The deliquency rate includes all oustanding mortgages that are at least 30 days late, but not in foreclosure. Serious deliquencies, loans that are more than 90 days past due, dropped compared with the previous quarter and the same quarter last year. Foreclosure starts dropped to the lowest level since 2007 and foreclosure inventory is the lowest since 3rd quarter 2010.
According to the MBA's chief economist, "While some have argued that this drop in foreclosures is a temporary drop which does not reflect the problems yet to come, this does not appear to be the case, at least at the national level. There are still problem loans that need to be resolved, but the idea that there is a growing backlog of loans being held back from foreclosure is simply not supported by these numbers."
It will be important to see whether this increase in deliquencies starts a new negative trend, or whether this rise was a temporary setback.
Read the MBA press release here.
Posted by John Blom, Broker
Hasson Company Realtors
johnblom@hasson.com
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