Mortgage Delinquencies Show Improvement
Late payments on single-family home mortgages improved on a consecutive quarter basis as more recovery from Hurricanes Harvey and Irma took hold, but more potential loan performance concerns lie ahead. Overall, seasonally adjusted delinquencies in the first quarter declined by 54 basis points from the previous quarter but were just 8 basis points lower than the same period in 2017, according to the Mortgage Bankers Association.
“Mortgage delinquencies decreased from the previous quarter across all loan types — conventional, VA, and in particular, FHA — as the effects of the September hurricanes dissipated,” Marina Walsh, the MBA’s vice president of industry analysis, said in a press release. “The strong economy, low unemployment rate, tax refunds and bonuses and home price appreciation were key factors that helped push delinquencies down in the first quarter.”
But for the time being, even the later-term delinquencies and defaults that were up in fourth quarter of 2017 look to have improved on a consecutive quarter basis. Most notably, the delinquency rate for FHA loans plummeted. The 136-basis-point consecutive quarter improvement in the delinquency rate for FHA loans recorded in the first quarter marked the largest single-quarter decline ever seen in the MBA’s National Delinquency Survey.