Mortgage Delinquencies Rise in Q1 2020


The first quarter of 2020 witnessed dramatic economic news, owing to the outbreak of COVID-19. Among these changes were those of American homeowners, whose abilities to keep up with their mortgages were adversely affected by the economic injury brought on by the pandemic, as reflected in 2020’s first quarter results of the Mortgage Bankers’ Association’s National Delinquency Survey.

Since the end of 2019, on a national level, the percent of loans past due (i.e., at least 30 days or more past due) increased by 59 basis points to 4.36% of all loans currently being serviced. At a state level, all states, as well as the District of Columbia and Puerto Rico, experienced increases in the percent of loans past due from the previous quarter, on a seasonally adjusted basis. Most states, however, experienced declines in the share of mortgage delinquencies of all loans being serviced on a year-over-year basis.

The figure above shows that while the mortgage delinquency rate rose in the first quarter of 2020 from the previous quarter, the number of home loans serviced declined by about 250,000. On absolute terms, delinquent mortgages still increased, to about 1.7 million home loans past due. On a more positive note, the “seriously delinquent” rate, i.e., the percentage of loans 90 or more days past due or loans in the process of foreclosure, decreased from the fourth quarter of 2019 by 9 basis points to 1.67%.

Many homeowners that have been left in dire straits have alternatively chosen to avoid delinquency by applying for forbearance. As of the week ending May 3, the MBA cites that the share of all U.S. mortgages in forbearance shot up from the previous week by 37 basis points, thus making up almost 4 million mortgages in forbearance. For MBA’s survey, though, some servicers were asked to report mortgages in forbearance as delinquent if the payment was not made based on the original terms of the mortgage, as would be the case in natural disasters.

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1 reply

  1. Is it any wonder that delinquencies are increasing when the mortgage industry either didn’t learn anything from 2008 or, worse, has chosen to ignore what it leaner to increase profits. The ads being run in 2020 urging homeowners to refinance to pay off credit card debt and other short term debt or to remodel are identical to those run before the 2008 meltdown. Wasn’t it nice said that those who do not learn from history are doomed to repeat it?

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