By David H. Stevens
PRESIDENT AND CEO, MORTGAGE BANKERS ASSOCIATION
third-quarter delinquencies elicit cautious optimism
This past november, the Mortgage Bankers association (MBa) released its third-quarter
national Delinquency Survey, showing that challenges persist in the housing market.
The seasonally adjusted delinquency rate for mortgage loans on one-to-four-unit residential properties fell to 7.99 percent in the third quarter, the lowest level recorded since
fourth quarter 2008. Meanwhile, the percentage of loans on which foreclosure actions were
started in the third quarter was 1.08 percent, a 12 basis points increase from the previous
quarter and a 26 basis points decline from one year ago.
although the delinquency picture looks better, the foreclosure data indicates that we
are not out of the woods yet. First, the increase in the foreclosure-starts rate was driven
by large increases by just a few servicers, concentrated in certain hardest-hit states, reflecting the progression of delinquent loans through the foreclosure process. Outside of
these states, improvement has continued, although at a slow pace because of the still-weak job market.
Second, the 30-day delinquency rate reached its lowest level since second quarter 2007, a
sign that new mortgage delinquencies have slowed. Foreclosure starts, however, increased
in the quarter — the first increase after three straight quarters of decline — and is now back
to the levels of first quarter 2011. This is largely driven by loans leaving the loss-mitigation
process and the ending of state remediation programs and foreclosure moratoria.
Source: Mortgage Bankers association
U. S. HISTORICAL DELINqUENC Y AND FORECLOSURE RATES
Twelve states saw an
unchanged or lower
for the quarter. among
those states, new
jersey, arkansas and
Washington had significant decreases across
all loan types, an implication that there might
have been state-specific factors causing
what may be a temporary stop on the initiation of the foreclosure
process. These states
also saw significant increases in the percentage of loans that are 90-plus days delinquent.
Meanwhile, the percentage of loans in the foreclosure process was unchanged quarter-over-quarter, but increased from third quarter 2010. The foreclosure inventory rate remains
elevated but is at the lowest point since 2010. Similar to the previous quarter, the top-five
states in terms of the number of loans in foreclosure make up more than 52 percent of the
The disparity in loans in foreclosure between the judicial and non-judicial states continues
to widen. Backlogs continue to grow in judicial states, with more new foreclosures entering an already clogged pipeline. Two prime examples of this phenomenon are California
and Florida: Both are facing similar unemployment rates and housing-price drops, yet
California’s foreclosure inventory rate is roughly 3. 5 percent while Florida’s is roughly 14. 5
percent. The difference? California can clear its foreclosure pipeline much faster because
foreclosures do not have to go through the court system.
Furthermore, MBa’s research indicates that the key driver of the delinquency and foreclosure rate continues to be unemployment. MBa predicts that unemployment wil
remain elevated through 2012, which could slow the improvement in delinquency and
Short-term delinquencies are down and states are working through their foreclosure
inventories. The unemployment rate remains stubbornly high, but is inching in the right
direction. There is no doubt challenges still lie ahead, but there is cause to be optimistic
that perhaps we have turned a corner.
david h. stevens is president and CEO of the Mortgage Bankers association. Previously, Stevens served
as assistant secretary for housing at the U.S. Department of Housing and Urban Development and was
appointed commissioner of the Federal Housing administration by President Obama. Stevens also was
president and chief operating officer of Long and Foster Companies, senior vice president at Freddie
Mac, and executive vice president at Wells Fargo. reach him at (202) 577-2700 or officeofthepresident@
Dan Green LOAN OFFICER WATERSTONE MORTGAGE
BY JENNIFER E. GARRETT
How important is marketing in today’s
If you’re not out there talking to potential customers,
someone else is. If you spend too much time at your
desk with your head down, you’re not spending any
time looking for new business. It’s great to have an
inbound referral network, but even loan officers
who do nothing but referrals still market to their own
database. If you stop reaching out to people, they’ll
stop reaching into your practice.
What marketing channels work best?
There is no marketing method that is bad if you have a
well-refined process that works. Cold calling can work
if it’s done right. any form of marketing can work if it’s
executed properly and done repeatedly. The key is
to have a strategy and to execute, and to continue to
execute over time. If you’re consistent in your message,
it’s hard not to succeed.
What different methods do you use?
I put the majority of my effort into digital marketing. That
includes using channels such as Twitter, but my blog is
the primary focus. I also e-mail newsletters that connect
to my blog. I use the blog as the hub of everything I do.
I don’t do printed newsletters, although I know they’re
effective. I don’t send postcards, although I know that’s
effective, too. It’s just not my style. I use digital because
that’s the area in which I’m most comfortable.
Do you use digital marketing also partly
because of cost?
There are two kinds of costs. There’s a cost to blogging
and that’s time. anytime I sit down to work on a blog
post, to me, that’s marketing, and it’s worth the time it
takes. I could spend that same time at a networking
event, but instead I use that time on my website.
Do brokers need to use some form of digital
Having a well-functioning, updated website is not an
elective at this point. It doesn’t need to be the primary
focus of your marketing, but at some point in the
transaction nearly all customers are going to go to your
website to see what you’re about. It’s okay to have a
website from your bank, but you probably want to have
your own personal site, too, that looks professional
and well maintained. as loan officers, we’re our own
brands. We work for banks or brokers, but we really
What should brokers do to prepare for 2012?
I think it’s time to start thinking about 2013 already. If
you’re starting at the beginning, you’re going to need
this whole year to get something ramped up. Identify
the market you want to pursue and spend this whole
year getting geared up for it. Marketing takes time.
jennifer E. Garrett is the editor of Scotsman Guide. reach her at
(800) 297-6061 or email@example.com.