Today, the Mortgage Bankers Association (“MBA”) released its National Delinquency Survey, revealing that more than 11 percent of U.S. homeowners are behind in their mortgage payments or in foreclosure. The survey revealed a 13 percent increase in delinquencies from the last quarter, the highest quarter-to-quarter increase since 1972. The survey also showed that the percentage of homes in the foreclosure process rose by 33 basis points in the last quarter to 3.3 percent. This represents an increase of 126 basis points from this time last year.
MBA’s Chief Economist and Senior Vice President for Research and Economics, Jay Brinkman, stated that, “The rate of new foreclosures has remained essentially flat for the last three quarters of 2008. This might be seen as a good sign for mortgage performance, but most other measures point to exactly the opposite conclusion. The percentage of loans 90 days or more past due jumped sharply in the fourth quarter. Normally servicers would have initiated foreclosure actions on a significant portion of these loans but delayed doing so for a variety of reasons, including working on loan modifications, complying with the guidelines of different investors, and various delays in different locales. In addition, some servicers report a spate of borrowers running their accounts 90 days delinquent in order to qualify for certain modifications.”
This survey was released on the same day that the House passed H.R. 1160, “Helping Families Save Their Homes Act,” that would, in part address the treatment of primary mortgages in bankruptcy and provide an additional incentive for servicers to modify loans.