Housing Crash 2: We Have Never Seen Mortgage Delinquencies Rise This Fast In U.S. History
If our economic numbers were going to improve substantially, now would be the time for it to happen. The COVID-19 pandemic seems to have hit a plateau for the moment, the civil unrest in our major cities has been reduced to a dull roar, and millions of Americans that originally lost their jobs have now gone back to work. If we are going to get some glimmers of hope for the economy, this is when we should see them, because the environment does not look promising once the summer ends. Unfortunately, the numbers that we keep getting just continue to directly contradict the narrative that any sort of a “recovery” is taking place. In fact, the Mortgage Bankers Association is reporting that the delinquency rate on residential mortgages shot up a whopping 386 basis points last quarter…
The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 8.22 percent of all loans outstanding at the end of the second quarter of 2020, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
The delinquency rate increased 386 basis points from the first quarter of 2020 and was up 369 basis points from one year ago.
When I first saw that number, I could hardly believe it.
386 basis points in a single quarter?
I had never heard of such carnage before, and the Mortgage Bankers Association is telling us that this was “the biggest quarterly rise” in the history of their survey…
“The COVID-19 pandemic’s effects on some homeowners’ ability to make their mortgage payments could not be more apparent. The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA’s survey,” said Marin Walsh, MBA’s Vice President of Industry Analysis.
The delinquency rate on FHA loans is particularly troubling.
During the first quarter, the delinquency rate on FHA loans was 9.7 percent, but by the end of the second quarter that number had shot up to 15.7 percent…