The MBA's National Delinquency Survey numbers for the first quarter came out today. The trade org's full press release is available here, and highlights a drop in reported delinquencies relative to one quarter ago (although delinquencies are really up, rising 43 basis points from year-ago levels). HW readers know I've taken numerous would-be stat providers to task in the past on the folly of reporting quarter-to-quarter comparisons, so the same advice applies here: pay attention to the yearly comparisons. Major media, however, have latched onto the tail-end of the default process, trumpeting that new foreclosures hit an all-time high in the first quarter. And rightfully so. Reuters covers this pretty well:
The Mortgage Bankers Association said the rate of loans entering the foreclosure process was 0.58 percent on a seasonally adjusted basis, or more than one out of 200 loans and 4 basis points higher than the previous quarter. The rate rose 17 basis points from a year ago.
A seventeen basis-point jump is nothing to sneeze at. And is Doug Duncan kidding me? Read this quote, taken from the press release:
"The rate of delinquencies is being driven by what is taking place in seven states. The percentage of loans in foreclosure would be well below the average of the last ten years were it not for Ohio, Michigan and Indiana, and the rate of foreclosures started nationwide would have fallen were it not for the big jumps in California, Florida, Nevada and Arizona. Those states have special circumstances that do not reflect what is happening in the rest of the country," said Doug Duncan, MBA's Chief Economist and Senior Vice President of Research and Business Development.
Wasn't it the NAR that pulled out the "all real estate is local" schtick not too long ago? What percentage of the US population lives in California, Florida, Nevada, Arizona, Ohio, Michigan, and Indiana? And if only we could just ignore what's taking place there and focus on all the states not being affected by these "special circumstances," right? Sounds very similar to the NAR's song and dance in reporting sales volume and median prices from not too long ago, and I'm not a fan of it. Foreclosures are at an all time high -- it doesn't matter where. Having those foreclosures concentrated in seven states doesn't lessen its national significance, somehow, does it? I've interviewed Doug in the past, and know him to be a reasonable and bright man, so I'm not really sure where this came from. Perhaps he was providing analysis, but the press release makes it sound like he's out to minimize the current mortgage market condition.