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Mass. mortgage delinquency rate fall
Mortgage delinquency rates plunged in the second quarter to the lowest level since the pandemic began, as the improving economy helps distressed homeowners get out of trouble.
The seasonally adjusted delinquency rate dropped to 5.47% of all loans outstanding, down from 8.22% a year earlier and the lowest since the first quarter of 2020, according to a survey by the Mortgage Bankers Association.
The decline in the delinquency rate for loans for veterans and Federal Housing Administration mortgages — the affordable path to homeownership for many first-time buyers and low-income Americans — was the biggest in data going back to 1979.
“It appears that borrowers in later stages of delinquency are recovering due to several factors, including improved employment and other economic conditions,” said Marina Walsh, MBA’s vice president of industry analysis.
The federal government may have staved off a foreclosure crisis by allowing people who lost income during the pandemic to defer mortgage payments. They can have principal and interest tacked on as a lump sum that only needs to be repaid when they sell or refinance.
While the federal foreclosure moratorium ended last month, distressed homeowners have been getting a boost from the rebounding economy and the supercharged housing market, which makes it easier for them to sell properties and potentially pocket a profit.
Because the moratorium had not yet lifted in the second quarter, the inventory of properties in foreclosure was the lowest since 1981. And it’s unlikely to rise much — at least for the next few months — because of a series of protections put in place by the Consumer Financial Protection Bureau.
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Good news via the BBJ:
The report found that, as of April 30, 5.79 percent of active home loans were delinquent in the so-called Boston-Quincy region. The rate was down from March’s rate of 5.91 percent and marked the region’s lowest delinquency rate on record since July 2009. CoreLogic qualifies a mortgage as delinquent if it is at least 90 days past due or in some stage of the foreclosure or OREO (other real estate owned) process.
The mortgage-delinquency rate for all of Massachusetts in April was 5.58 percent, while the national rate was 7.39 percent. Both the state and U.S. rates were year-over-year improvements from the delinquency levels posted in April 2010, according to CoreLogic.
