Mortgage Delinquencies Decline in Q2 2021

According to the Mortgage Bankers Association’s (MBA) National Delinquency Survey (NDS) for Q2 of 2021, the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 5.47% of all loans outstanding. The delinquency rate was down 91 basis points from the Q1 of 2021 and down 275 basis points from one year ago. By stage, the 30-day delinquency rate decreased 5 basis points to 1.41% and the 60-day delinquency rate decreased 15 basis points to 0.52, both at their lowest levels in the history of the survey. The 90-day delinquency bucket decreased 72 basis points to 3.53%.

In a statement prepared for the release of the Q2 NDS, Marina Walsh, CMB, MBA’s Vice President of Industry Analysis said, “Mortgage delinquencies across all loan types — conventional, FHA, and VA — reached their lowest levels since the first quarter of 2020. The drop in the delinquency rate for FHA loans and VA loans was the largest quarterly decline for both in the history of MBA’s survey dating back to 1979.”

Walsh continued, “Much of the second-quarter improvement can be traced to later-stage delinquent loans — those 90 days or past due, but not in foreclosure. In fact, the 90-day delinquency rate dropped by 72 basis points, which is another record decline in the survey. It appears that borrowers in later stages of delinquency are recovering due to several factors, including improved employment and other economic conditions, the availability of home retention workout options after forbearance, and a strong housing market that is bringing additional alternatives to distressed homeowners.”