Mortgage Delinquencies Decrease in Q1 of 2022—Seventh Consecutive Quarterly Decline

According to the latest Mortgage Banker Association’s (MBA) National Delinquency Survey (NDS), released today (5-5-22), the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjust rate of 4.11% of all loans outstanding at the end of Q1 of 2022.

For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage. The delinquency rate decreased -54 basis points from Q4 of 2021 and was down -227 basis points year-over-year.

In a statement prepared to accompany today’s release of the NDS, Marina Walsh, CMB, MBA’s Vice President of Industry Analysis, said, “The mortgage delinquency rate dropped for the seventh consecutive quarter, reaching its lowest level since the fourth quarter of 2019. The decrease in delinquency rates was apparent across all loan types, and especially for FHA loans. The delinquency rate for FHA loans declined 118 basis points from fourth-quarter 2021 and was down 509 basis points from one year ago.”

According to Walsh, most of the improvement in loan performance can be attributed to the movement of loans that were 90-days or more delinquent. The majority of these aged delinquencies were either cured or entered post-forbearance loan workouts. The expiration of pandemic-related foreclosure moratoriums led to a modest increase in foreclosure starts from the record lows maintained over the past two years. At 0.19 percent, the foreclosure starts rate remains below the quarterly average of 0.41 percent dating back to 1979.

“Given the nation’s limited housing inventory and the variety of home retention and foreclosure alternatives on the table across various loan types, the probability of a significant foreclosure surge is minimal,” Walsh added. “Borrowers have more choices today to either stay in their homes or sell without resorting to a foreclosure.”