Mortgage Delinquency Rate Declines in Q4 and Year-Over-Year in 2021

The Mortgage Bankers Associations (MBA) released today (2-10-22) the results of their National Delinquency Survey (NDS) for Q4 2021. According to the NDS, the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.65% of all loans outstanding at the end of December.

MBA asked 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 was down -23 basis points from Q3 2021 and down -208 basis points from one year ago.

In a statement prepared to accompany the NDS, Marina Walsh, CMB, MBA’s Vice President of Industry Analysis said, “Mortgage delinquencies descended in the final three months of 2021, reaching levels at or below MBA’s survey averages dating back to 1979. The fourth-quarter delinquency rate of 4.65 percent was 67 basis points lower than MBA’s survey average of 5.32 percent. Furthermore, the seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.83 percent in the fourth quarter, close to the long-term average of 2.80 percent.”

“The quarters right before the COVID-19 pandemic represented some of the lowest delinquencies ever recorded,” Walsh added. “Delinquencies are now approaching levels not seen since the first quarter of 2020, which is a testament to the strength of the U.S. labor market.”

Economic forces have prevailed, according to Walsh, including low unemployment, more labor force participation, higher wage growth, and accumulated home equity—as well as support for homeowners through post-forbearance loan workouts.

“Potential negative effects of the omicron variant were also muted this past quarter,” said Walsh.