Delinquencies on residential properties fell to 4.65% of all outstanding loans in Q4 2021, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
The delinquency rate fell 23 basis points from Q3 2021 and 208 basis points year-over-year (YOY). Q4’s delinquency rate was 67 basis points lower than MBA’s survey average of 5.32%, while the rate for seriously delinquent loans was 2.83%, close to the longer-term average of 2.80%.
MBA’s survey classifies loans as delinquent if the payment was not made based on the original terms of the mortgage.
“Mortgage delinquencies descended in the final three months of 2021, reaching levels at or below MBA’s survey averages dating back to 1979,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis.
“The quarters right before the COVID-19 pandemic represented some of the lowest delinquencies ever recorded. 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.”
Walsh noted that low unemployed, wage growth, and rising home equity, alongside support for homeowners in forbearance, contributed to the positive numbers in Q4.
“Potential negative effects of the omicron variant were also muted this past quarter,” Walsh added.
ATTOM Data Solutions reported that foreclosure-related filings jumped 29% from December and 139% YOY, with completed foreclosures reaching their highest levels since March 2020. But filings are still historically low.
Forbearance restarts and new plans have also been on the rise as forbearance exits slow, the result of many homeowners having already exited their Covid-19 related plans.
“It is likely that the remaining borrowers in forbearance have experienced either a permanent hardship that may require more complex loan workout solutions, or they have encountered a recent hardship for which they are now seeking relief,” Wash recently said of forbearance rates.