Mortgage Delinquencies Jump In Q2

By Jim Perskie

The delinquency rate for home mortgages increased by nearly 4 percentage points during the second quarter as the Covid-19 pandemic fully took hold in the United States, the Mortgage Bankers Association announced Monday.

The rate climbed to 8.22 percent of all mortgage loans at the end of June – up 386 basis points from the end of the first quarter and 369 basis points from a year ago. New Jersey (up 628 basis points) and Nevada (up 600 basis points) led the way with the biggest increases.

“The COVID-19 pandemic’s effects on some homeowners’ ability to make their mortgage payments could not be more apparent. The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA’s survey,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “The second quarter results also mark the highest overall delinquency rate in nine years, and a survey-high delinquency rate for FHA loans.”

An estimated 4.2 million homeowners were in forbearance plans as of June 28. MBA asked lenders to report the loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage.

MBA noted that delinquencies tracked closely with job losses. The five states with the largest quarterly increases in delinquency rates were New Jersey, Nevada, New York, Florida, and Hawaii – all with a prevalence of leisure and hospitality jobs that were impacted severely by the pandemic.

See the full report here.