The national delinquency rate on outstanding home mortgages ticked up to 8.44% in the second quarter, which means roughly $793.4 billion of residential loans are 30 days or more past due.
According to new figures compiled by the Mortgage Bankers Association (MBA), late payments increased 12 basis points from the first quarter, but are down 141 basis points from a year ago. (The numbers are seasonally adjusted.)
“While overall mortgage delinquencies increased only slightly between the first and second quarters of this year, it is clear that the downward trend we saw through most of 2010 has stopped,” said MBA chief economist Jay Brinkmann. “Mortgage delinquencies are no longer improving and are now showing some signs of worsening.”
But the late payment figures exclude foreclosures. At June 30, 4.43% of mortgages were in some stage of foreclosure, a 9 basis point decline from the first quarter and a 14 basis point drop from a year ago.
Brinkmann blamed a weak labor market for the worsening late payment numbers, noting that that mortgages “that are one payment, or 30 days, past due are very much driven by changes in the labor market, and the increase in these delinquencies clearly reflects the deterioration we saw in the labor market during the second quarter.
Weekly first-time claims for unemployment insurance started the quarter at 385,000 but finished the quarter at 432,000. The unemployment rate started the quarter at 8.8% but climbed to 9.2% by the end of the quarter.”
According to figures compiled by National Mortgage News and the Quarterly Data Report, U.S. housing debt totaled $9.4 trillion at June 30, flat compared to March 31.
The MBA also spoke about the number of residential loans entering the foreclosure process. This is falling with "no evidence" that a backlog is building up that could suddenly flood the market, according to Brinkmann.
Many are worried that servicing and foreclosure problems and ongoing settlement talks between major servicers and state attorneys general have slowed the foreclosure process.
"There is no evidence of a nationwide artificial delay in loans going into foreclosure," Brinkmann told reporters Monday during a briefing on its new delinquency survey. He noted that if there were a backlog, the percentage of seriously delinquent mortgages (90 days or more past due) would be increasing.
To the contrary, the serious delinquency rate for all mortgage loans was 3.61% as of June 30, down from 4.82% a year ago. The 90 days or more past due rate was 3.62% in the first quarter.
"There is nothing in the structure at this moment that indicates an unknown overhang that is going to take people by surprise," Brinkmann said.
The MBA report also shows that foreclosure starts are down to the lowest level since the first quarter of 2007.