The quarter-to-quarter increase in the mortgage delinquency rate is nothing to get excited about — yet, said a member of the Mortgage Bankers Association economics team.
The seasonally adjusted delinquency rate for the fourth quarter was 4.8%, up 28 basis points compared with the third quarter and 3 basis points higher than the fourth quarter of 2015, the MBA's National Delinquency Survey found.
While delinquencies increased in the fourth quarter, foreclosure starts and the percentage of loans in foreclosure declined on a year-over-year and a quarter-to-quarter basis.
"In the grand scheme of things, it looks like a little blip," but it is too early to see if that could be the start of a larger trend, said Marina Walsh, MBA vice president of industry analysis, at the organization's servicing conference in Dallas on Feb. 16.
The increase might be due to the normal mortgage loan aging process, with several post-crisis origination vintages being in or entering their peak default periods.
Another factor was that the third quarter default rate was so low it was not a surprise that the rate increased in the following quarter, she said.
The rate of foreclosure actions started was 0.28% in the fourth quarter, down 2 basis points from the previous quarter and 8 basis points than one year ago. This is the lowest rate of new foreclosures started since the fourth quarter of 1988, the MBA said.
Meanwhile, there were 1.53% of loans in the foreclosure process at the end of the fourth quarter, down 2 basis points from the third quarter and 24 basis points lower than one year ago. This was the lowest foreclosure inventory rate since the second quarter of 2007.
