Mortgage Loan Delinquency OverviewA mortgage loan that is 30 to 60 days past due with no payments being made is considered to be in a delinquent or default status. Delinquent mortgage loans run a higher risk of bankruptcy or foreclosure and, from a servicing perspective, are not as profitable as loans with current payments. The investor may be unable to sell the loan on the Mortgage Secondary Market due to its delinquent status and if the investor is pooling the loan into a Mortgage Backed Security (MBS) it may result in the investor having to assign a lower grade or remove the loan from the pool all together. For these reasons mortgage industry investors track and report delinquency statistics for mortgage loans acquired from their sellers. Sellers with high delinquency ratios are sent warning letters and their loans are subject to post purchase quality control reviews. High delinquency ratios for a seller with delegated underwriting authority suggest flawed or erroneous underwriting practices and in some cases fraud.
Page 1 2 3
Suggest Site Content