by Calculated Risk on 5/23/2011 01:23:00 PM
Monday, May 23, 2011
Mortgage Delinquencies by Loan Type
By request, the following graphs show the percent of loans delinquent by loan type: Prime, Subprime, FHA and VA. First a table comparing the number of loans in Q2 2007 and Q1 2011 so readers can understand the shift in loan types:
MBA National Delinquency Survey Loan Count | ||||
---|---|---|---|---|
Q2 2007 | Q1 2011 | Change | Seriously Delinquent | |
Prime | 33,916,830 | 31,897,319 | -2,019,511 | 1,859,614 |
Subprime | 6,204,535 | 4,180,219 | -2,024,316 | 1,109,848 |
FHA | 3,030,214 | 6,285,254 | 3,255,040 | 511,620 |
VA | 1,096,450 | 1,366,455 | 270,005 | 62,720 |
Survey Total | 44,248,029 | 43,729,247 | -518,782 | 3,572,679 |
Both the number of prime and subprime loans have declined over the last four years; the number of suprime loans is down by about one-third. Meanwhile the number of FHA loans has increased sharply.
Note: There are about 50 million total first-lien loans - the MBA survey is about 88% of the total.

The first graph is for all prime loans. This is the key category now ("We are all subprime!").
Since there are far more prime loans than any other category (see table above), over half the loans seriously delinquent now are prime loans - even though the overall delinquency rate is lower than other loan types.

Although the delinquency rate is still very high, the number of subprime loans had declined sharply.

Another reason for the improvement was eliminating Downpayment Assistance Programs (DAPs). These were programs that allowed the seller to give the buyer the downpayment through a 3rd party "charity" (for a fee of course). The buyer had no money in the house and the default rates were horrible.

There are still quite a few subprime loans that are in distress, but the real keys going forward are prime loans and FHA loans.