The share of homeowners paying their mortgages late, as well as the percentage
of mortgages in the foreclosure process increased in the third quarter of 2001,
according to a quarterly survey conducted by the Mortgage Bankers Association
of America (MBA).
In MBA’s latest National Delinquency Survey (NDS), the delinquency rate for
loans on one- to four-unit residential properties was 4.87 percent in the third
quarter of 2001, up 24 basis points from the second quarter of 2001. The
percentage of loans in which foreclosure started during the quarter rose 2
basis points to 0.38 percent, while the percentage of loans in the process of
foreclosure at the end of the quarter rose 4 basis points to 0.95 percent.
Douglas G. Duncan, MBA’s Chief Economist, attributes the higher delinquency
rate to the economy entering a recession, resulting in increasing unemployment.
The events of September 11 may have also played a factor in driving up
short-term delinquencies.
"The weakening GDP and job losses in the technology and manufacturing
sectors have affected homeowners’ ability to keep their mortgage payments
current," said Duncan.
The delinquency rate increased for each of the three loan types during the
third quarter of 2001. The rate for conventional loans was 3.13 percent, up 20
basis points from the previous quarter, and the rates for FHA and VA loans were
11.36 percent and 8.11 percent—up 57 and 48 basis points—respectively.
The inventory of loans in the process of foreclosure at the end of the
quarter increased for each of the loan types. The percentage of conventional
loans in foreclosure increased 2 basis points to 0.70 percent, while the
percentage of FHA loans in foreclosure increased 14 basis points to 1.94
percent. The percentage of VA loans in foreclosure rose 5 basis points to 1.25
percent.
On a smaller sample of loans, the NDS found that the delinquency rate for
both fixed-rate mortgages (FRMs) and adjustable-rate mortgages (ARMs) increased
in the third quarter. The rate rose 18 basis points to 3.97 percent for
fixed-rate mortgages and rose 30 basis points to 6.26 percent for ARMs.
Published: December 3, 2001
Use of this article without permission is a violation of federal copyright laws.
