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Economy in Brief

U.S. Mortgage Delinquencies Slip
by Tom Moeller   November 19, 2010

It may be because the mortgage pool has fewer loans in it, but the percentage of loans that are delinquent has peaked. As of Q3, the percentage fell to 9.1%, down from its Q1 high of 10.1%. But indeed, the number of loans serviced fell 0.9%. Despite the decline, the percentage was roughly double the 2004 low.

Modest declines in delinquency rates spread evenly throughout the spectrum of loan type. Nevertheless, the percentage of subprime delinquent loans (26.2%) outnumbered the conventional loans by four times (6.3%). For both, adjustable rate loans were the most likely to be in arrears. Nearly one-third of subprime, adjustable rate loans were delinquent. The detail behind the total indicates that 19.1% of those loans were delinquent by 90 days or more. Four percent of these loans were in foreclosure though that rate was down sharply from the 2008 quarterly peak of 7.1%.

Foreclosure Documentation Issues is yesterday's speech by Fed Governor Elizabeth A. Duke and it can be found here.

The mortgage delinquency data is available in Haver's MBAMTG database.

Mortgage Delinquencies Number of
Mortgages(Q3)
Q3'10 Q2'10 2009 2008 2007
All Mortgages Past Due 43,967,725 9.1% 9.9% 9.5% 7.9% 5.8%
 Prime Conventional 32,404,801 6.3 7.1 6.7 5.1 3.2
   Fixed Rate 27,299,129 5.2 6.0 5.6 3.9 2.6
   Adjustable Rate 4,188,700 13.3 13.8 12.1 9.7 5.5
 Subprime Conventional 4,291,154 26.2 27.0 25.3 21.9 17.3
   Fixed Rate 2,569,311 23.8 25.2 23.8 19.4 14.0
   Adjustable Rate 1,552,386 29.8 29.5 26.7 24.2 20.0
FHA 5,960,013 12.6 13.3 13.6 13.7 13.1
VA 1,311,757 7.4 7.8 7.4 7.5 6.5
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