The Mortgage Bankers Association released its quarterly National Delinquency Survey for the third quarter last week. The survey reflected a dim outlook for the housing and subprime sectors for 2008. Total delinquencies on a seasonally adjusted basis for one-to-four unit residential properties jumped 47 basis points to 5.59% from the second quarter. Compared with a year ago, delinquencies are up 92 basis points, which is the highest point since 1986, the MBA said.
Delinquencies in all loan categories had risen in the quarter. For instance, prime loans gained 39 basis points to 3.12%, subprime loans surged 149 basis points to 16.31%, Federal Housing Authority loans increased 34 basis points to 12.92%, and Department of Veterans Affairs loans rose 43 basis points to 6.58%. From a year ago, delinquencies were up for all categories except VA, which remained unchanged.
In terms of serious delinquencies (90 days or more delinquent or in the process of foreclosure), the survey reported a 48 basis point gain to 2.95% in the third quarter and a 95 basis point jump from a year ago. All loan categories reported gains. Distinguishing between ARMs and fixed-rate loans, the survey reported seriously delinquent rates on ARMs jumped 110 basis points for prime loans to 3.12% and surged 323 basis points for subprime to 15.63% in the second quarter. Since 3Q06, the serious delinquent rate gained 198 basis points for prime ARMs and jumped 791 basis points for subprime.
On the fixed-rate side, serious delinquencies are up a modest 16 basis points for prime loans to 0.83% and 77 basis points to 6.61% for subprime fixed. Compared with a year ago, they were at 18 basis points and 96 basis points, respectively.
In the third quarter, the MBA found foreclosure rates increased to 1.69% from 1.40% in the second quarter and from 1.05% in 2Q06. By category, prime loans increased 20 basis points to 0.79%, subprime were up 137 basis points to 6.89%, and FHA and VA loans were up just seven basis points and one basis point to 2.22% and 1.03%, respectively. Year-over-year, the foreclosure inventory rate was higher by 35 basis points for prime, 303 basis points for subprime, down six basis points for FHA and negative nine basis points for VA mortgages.
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