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 the fourth quarter of 2021, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
For the purposes of the survey, MBA asks 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 the third quarter of 2021 and down 208 basis points from one year ago.
“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 fourth-quarter delinquency rate of 4.65% was 67 basis points lower than MBA’s survey average of 5.32%. 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% in the fourth quarter, close to the long-term average of 2.80%.”
“The quarters right before the COVID-19 pandemic represented some of the lowest delinquencies ever recorded,” added Walsh. “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.
