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24 FORECLOSURE STARTS RISE AS NATURAL DISASTER MORATORIUMS LIFT According to the Mortgage Bankers Association's (MBA) National Delinquency Survey, the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.06 percent of all loans outstanding at the end of the fourth quarter of 2018. Mortgage delinquencies dropped to an 18-year low in the Q 4 2018, data found. "e overall national mortgage delinquency rate in the fourth quarter was at its lowest level since the first quarter of 2000," said Marina Walsh, VP of Industry Analysis at MBA. "What's even more noteworthy, the delinquency rate dropped from the previous quarter and on a year-over-year basis across all loan types and stages of delinquency." e report also indicated that the rate was down 41 basis points from the third quarter of 2018 and 111 basis points from one year ago. e percentage of loans on which foreclosure actions were started in Q 4 reflected an increase by two basis points to 0.25 percent. Walsh noted that there were improvements in states adversely impacted by natural disasters these last two years. e delinquency rate in Florida dropped 458 basis points on a year-over-year basis, once the effects of Hurricane Irma dissipated. In Texas, the rates dropped by 218 basis points in Q 4 compared to a year ago after Hurricane Harvey dissipated. States such as North Carolina, South Carolina, Mississippi, Arkansas, and Alabama that were hit by recent storms showed improvements at the end of last year, after recording a spike in delinquencies in Q 3. "With the unemployment rate near a 50- year low, wage growth trending higher, and household debt levels relative to disposable incomes at a 35-year low, homeowners are in great shape, and mortgage performance is quite strong," Walsh said. e survey found a rise in foreclosure starts by two basis points in Q 4, which Walsh states was driven by the lifting of foreclosure moratoriums in states impacted by natural disasters, in combination with severely delinquent loans that have finally moved into the foreclosure process—particularly those loans in judicial states where foreclosure procedures are much slower moving. In its key findings, the survey revealed that in relation to Q 3 2018, the 30-day delinquency rate decreased 22 basis points to 2.29 percent, the 60-day delinquency rate decreased three basis points to 0.74 percent, and the 90-day delinquency bucket decreased 15 basis points to 1.03 percent. e percentage of loans in the foreclosure process at the end of Q 4 at 0.95 percent is down four basis points from the Q 3 2018 and 24 basis points lower than one year ago— lowest foreclosure inventory rate since the first quarter of 1996. For conventional loans, the rates declined to 3.19 percent over the previous quarter. e FHA delinquency rate dropped to 8.65 percent while the VA delinquency rate decreased to 3.71 percent, over the previous quarter. According to the survey, the serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.06 percent—a decrease of seven basis points from last quarter, and a decrease of 85 basis points from last year.