Washington, DC, June 29--The first-quarter 2005 National Delinquency Survey (NDS), released by the Mortgage Bankers Association (MBA), shows that the seasonally adjusted (SA) delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 4.31 percent at the end of the first quarter, down 15 basis points from the first quarter of 2004 and down 7 basis points from the fourth quarter of 2004.
This quarter’s NDS results cover approximately 39.4 million loans (29.4 million prime loans, 5.1 million subprime loans, and 5.0 million government loans).
The percentage of loans in the foreclosure process was 1.08 percent at the end of the first quarter, a drop of 21 basis points from the previous year and a drop of 7 basis points from the fourth quarter of 2004. The SA rate of loans entering the foreclosure process was 0.42 percent in the first quarter, down 5 basis points from the previous year and down 4 basis points from the fourth quarter of 2004.
"Consumers improved their household finances and the percentage of homeowners making their mortgage payments on time increased to nearly 96 percent," said Doug Duncan, MBA’s chief economist and senior vice president. Economic growth is expected to remain strong over the next couple of years. Likewise, job growth should be steady in the presence of modest interest rate rises. These expectations likely mean we will continue to see moderate declines in delinquencies for the next few quarters."
The SA delinquencies for adjustable rate (ARM) and fixed rate (FRM) products are generally down from last year and last quarter. Over the year, the SA delinquency rate for prime ARM products is down 22 basis points (from 2.28 percent to 2.06 percent), while the percentage among prime FRM products increased two basis points (from 2.00 percent to 2.02 percent).
Since the first quarter of 2004, the SA delinquency rate for subprime ARM products has decreased 74 basis points (from 10.99 percent to 10.25 percent), while the rate for subprime FRM products dropped 153 basis points (from 10.63 percent to 9.10 percent).
Since last quarter, the SA delinquency rate for prime ARM loans has decreased five basis points (from 2.11 percent to 2.06 percent), whereas the rate for prime FRM products declined two basis points (from 2.04 percent to 2.02 percent). Compared with fourth quarter of 2004, the SA delinquency percentage among subprime ARM products increased 42 basis points (from 9.83 percent to 10.25 percent), while the rate for subprime FRM loans decreased 62 basis points (from 9.72 percent to 9.10 percent).
Since the first quarter of 2004, the SA delinquency rate has decreased 9 basis points for prime loans (from 2.26 percent to 2.17 percent), 104 basis points for subprime loans (from 11.66 percent to 10.62 percent), and 23 basis points for VA loans (from 7.39 percent to 7.16 percent), while increasing 3 basis points among FHA loans (from 11.70 percent to 11.73 percent).
Since fourth quarter of 2004, the SA delinquency rate decreased 5 basis points for prime loans and 50 basis points for FHA loans, whereas the rate increased 29 basis points for subprime loans and 19 basis points for VA loans.
The foreclosure inventory percentage decreased for all loan types over the year: 7 basis points for prime loans (from 0.53 percent to 0.46 percent), 137 basis points for subprime loans (from 4.86 percent to 3.49 percent), 22 basis points for FHA loans (from 2.78 percent to 2.56 percent) and 15 basis points for VA loans (from 1.53 percent to 1.38 percent).
