This week, MBA released our quarterly National Delinquency Survey (NDS). The results show that only 0.38 percent of outstanding mortgage loans entered foreclosure during the third quarter this year, the lowest level in more than ten years. In addition, looking at the data since the start of the survey in 1979, foreclosure starts are solidly below the historical average of 0.45 percent, and only slightly above the historical median of 0.35 percent. These numbers are further proof that the real estate finance industry is meeting consumer demand for mortgages more responsibly than ever. In fact, nationwide “legacy loans,” those originated prior to 2009, accounted for 80 percent of the loans that of “seriously delinquent” loans, or those that are over 90 days behind on payments or in the foreclosure process. And even for legacy loans, the overall rate of serious delinquencies decreased.
In the wake of the financial crisis, mortgage lenders worked with regulators to make fundamental changes in controls and compliance and improve the consumer experience. The result of those endeavors is a healthy housing finance system that is an essential pillar of the economy. With home ownership so central to building wealth for families, supporting sustainable mortgage lending is as vital as ever.
But an unhealthy tone continues to exist that is making some borrowers reticent to consider homeownership and taking out a mortgage. The constant barrage of lawsuits and antagonistic language from regulators makes lenders scared to lend and borrowers afraid to borrow. Regulators need to support consumers’ ability to secure housing finance and move beyond a punitive mindset that fosters uncertainty and discourages lending.
It’s time to turn the page on the financial crisis. In order to continue helping families buy homes and build wealth, it’s time to change the tone here in Washington and commend the soundness of mortgage lending in America today. Housing finance is being extended more safely than ever.
We have a generational opportunity to support household formation in this country, especially among first-time homebuyers and in low-income communities. It’s time to recognize and celebrate the progress made and the fundamental health of the mortgage industry.