Investor-Owned Properties Leading Delinquencies

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WASHINGTON, DC-Recent data released by the Mortgage Bankers Association confirms what many had suspected about borrower defaults: properties that are not occupied by the owners–that is, properties purchased for investment purposes–are defaulting faster than those occupied by the owners. MBA found that this pattern is a major driver of defaults in the four states with the fastest rising rates of delinquent loans: Nevada, Florida, Arizona and California.

As of June 30, 32% of prime mortgage defaults in Nevada were on non-owner occupied properties, along with 24% of subprime loans. In Florida, the non-owner occupied shares were 25% for prime loans and 14% for subprime loans. In Arizona, 26% of prime loan defaults were non-owner occupied and 18% of subprime loans. In California, the rate was 21% of prime defaults and 15% of subprime. By contrast, non-owner occupied homes nationwide accounted for only 13% of prime defaults and 11% of subprime defaults.