2002 3Q delinquencies down, foreclosures flat.


THE MORTGAGE BANKERS ASSOCIATION OF America's (MBA's) third-quarter 2002 National Delinquency Survey (NDS) shows that the number of homeowners who are delinquent with their mortgage payments dropped and the number in the foreclosure process remained flat compared with second-quarter 2002.

"There's some good news in this survey. We believe that delinquencies have peaked and, as the economy continues its recovery, the housing market will continue to make its contribution," said Doug Duncan, MBA senior vice president and chief economist. "We believe going forward there will be fewer households facing the harsh economic reality of unemployment that helped to drive up delinquencies and foreclosures in the first two quarters of 2002. Certainly that could change with any unforeseen circumstances, but all indicators are pointing toward a growing economy and ultimately an improving job market."

The seasonally adjusted delinquency rate (mortgage payments that are anywhere from 30 days to 90 days or more past due, but not in the process of foreclosure) for mortgage loans on one-to-four-unit residential properties was 4.66 percent at the end of the third quarter of 2002. This represents a drop of 11 basis points from the second quarter, and a drop of 17 basis points from the third quarter of 2001.

The decline in the total number of delinquencies was driven by a drop in the percentage of loans that were 30 days delinquent, from 3.2 percent in the second quarter to 3.06 percent. The 60-day delinquency percentage was unchanged at 0.79 percent, and the percentage of loans 90 days or more past due increased from 0.78 percent to 0.82 percent.

For conventional loans, total delinquencies dropped from 3.1 percent in the second quarter of 2002 to 3.04 percent in the third quarter. Federal Housing Administration (FHA) delinquencies decreased from 11.81 percent to 11.62 percent, and Department of Veterans Affairs (VA) loan delinquencies decreased from 8 percent to 7.81 percent.

Due to the growth of the subprime market, generally, the number of subprime loans included in the survey's conventional loan category has, over time, begun to increase. MBA's third-quarter 2002 survey includes more than 34 million loans. As a percentage of all loans in the...

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