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Delinquency and Foreclosure Rates Decline to Lowest Level in Six Years

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“We have been collecting metro area data for over a year now and these are showing improvements similar to the national numbers. Among the 25 largest metropolitan areas, the Baltimore-Towson metro area had the highest 90+ day delinquency rate at 3.87 percent, but that rate was an improvement from 4.91 percent in the fourth quarter of 2012. The Minneapolis-St Paul metro had the lowest at 1.43 percent. With respect to the proportion of loans in foreclosure, Miami had the highest rate at 10.34 percent, but it also had the largest decrease in its foreclosure rate over the past year. The two metro areas out of the top 25 that showed an increase in loans in foreclosure over the year were Nassau-Suffolk, New York and Edison-New Brunswick, New Jersey.”

Change from last quarter (third quarter of 2013)
On a seasonally adjusted basis, the overall delinquency rate decreased for all loan types, except for subprime fixed loans, subprime ARM loans and FHA loans. The seasonally adjusted delinquency rate decreased 12 basis points to 3.23 percent for prime fixed loans and 53 basis points to 5.44 percent for prime ARM loans. For subprime loans, the delinquency rate increased 32 basis points to 19.52 percent for subprime fixed loans and 87 basis points to 22.33 percent for subprime ARM loans. The delinquency rates for VA loans fell by 12 basis points to 5.29 percent and the FHA delinquency rate rose by 41 basis points to 10.47 percent.

The non-seasonally adjusted percentage of loans in foreclosure, also known as the foreclosure inventory rate, decreased from 3.08 percent last quarter to 2.86 percent. The foreclosure inventory rate for prime fixed loans decreased 16 basis points to 1.56 percent, and the rate for prime ARM loans decreased 69 basis points from last quarter to 3.85 percent. For subprime loans, the rate for subprime fixed loans decreased 71 basis points to 8.28 percent and the rate for subprime ARM loans decreased 97 basis points to 15.48 percent. The foreclosure inventory rate for FHA loans decreased nine basis points to 3.27 percent, while the rate for VA loans decreased three basis points to 1.78 percent.

The non-seasonally adjusted foreclosure starts rate decreased three basis points for prime fixed loans to 0.30 percent, one basis point for prime ARM loans to 0.59 percent, 39 basis points for subprime fixed to 1.47 percent, 100 basis points for subprime ARM loans to 1.91 percent, two basis points for FHA loans to 0.75 percent, and increased three basis points for VA loans to 0.47 percent.

Change from last year (fourth quarter of 2012)
Given the challenges in interpreting the true seasonal effects in these data when comparing quarter to quarter changes, it is important to highlight the year over year changes of the non-seasonally adjusted results.

Compared with the fourth quarter of 2012, the foreclosure inventory rate decreased 54 basis points for prime fixed loans, 283 basis points for prime ARM loans, 100 basis points for subprime fixed, 276 basis points for subprime ARM loans, 58 basis points for FHA loans, and 30 basis points for VA loans.
Over the past year, the non-seasonally adjusted foreclosure starts rate decreased eight basis points for prime fixed loans, 38 basis points for prime ARM loans, 35 basis points for subprime fixed, 95 basis points for subprime ARM loans, 11 basis points for FHA loans, and two basis points for VA loans.

For more information, visit www.mba.org.

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