MBA Q1 delinquency and foreclosure rates rise to fresh records
* The overall mortgage delinquency rate soared to 9.12% in Q1 2009 from 7.88% in Q4 2008 and 6.35% a year earlier. This is yet another record high for the delinquency rate (the MBA data goes back to 1972; chart shown above).
* The subprime DQ rate climbed to 24.95% from 21.88% a quarter earlier and 18.79% a year earlier. The prime-only DQ rate rose to 6.06% from 5.06% in Q4 2008 and 3.71% a year earlier. We are continuing to see the delinquencies migrate up the mortgage food chain, too. Even prime fixed-rate loans, the best historical performers, are doing much worse. The DQ rate there climbed to 4.68% from 3.92% a quarter earlier. Subprime ARMs continue to be the mangiest muts in the kennel, though. The DQ rate there hit 27.58%, up from 24.22% a quarter prior.
* The percentage of mortgages entering the foreclosure process jumped to 1.37% from 1.08% a quarter earlier. That is the highest level in U.S. history. The overall percentage of mortgages in any stage of foreclosure also jumped to a record 3.85% from 3.3% in Q4 2008.
* Regionally, delinquency rates were the highest in Nevada (11.75%), Mississippi (11.7%), Florida (10.67%), and Michigan (10.43%). North Dakota (3.31%) and South Dakota (3.52%) fared the best.
Mortgage performance is deteriorating across the board, with no "green shoots" to be found. Even FHA and VA delinquencies are starting to climb as the job market worsens and home prices continue to fall. Long ago, I predicted that the mortgage delinquency and foreclosure problems would migrate up the mortgage food chain -- from subprime, to Alt-A to prime. There is abundant evidence that this process is underway. Indeed, the delinquency rate on "cream of the crop" loans ... prime fixed rate mortgages ... has more than doubled in the past two years to a record-high 4.68%.
While mortgage modification programs will help save some borrowers, others are just too far gone. They lied about their incomes. They have no assets to fall back on. They're upside down on their homes. And/or they're losing their jobs. So we'll be coping with an elevated level of foreclosures for some time.