This PDF is a selection from an out-of-print volume from the National
Bureau of Economic Research
Volume Title: Home Mortgage Delinquency and Foreclosure
Volume Author/Editor: John P. Herzog and James S. Earley
Volume Publisher: NBER
Volume ISBN: 0-87014-206-2
Volume URL: http://www.nber.org/books/herz70-1
Publication Date: 1970
Chapter Title: Appendix A: Sampling Techniques, Questionnaires,
and Worksheets
Chapter Author: John P. Herzog, James S. Earley
Chapter URL: http://www.nber.org/chapters/c3297
Chapter pages in book: (p. 87 - 104)
Appendix A
Sampling Techniques, Questionnaires,
and Worksheets
United States Savings and Loan League Data
PARTICIPATING INSTITUTIONS
In selecting a sample of savings associations for the delinquency study
the League aimed at a cross section of the business that would reflect
primarily geographic patterns of delinquency. No attempt was made to
include size or other institutional differences except within the geo-
graphic framework. The basis for the regional distribution of delin-
quencies was reports from associations to the League's Data Exchange
Group (now called the MIRRORS group).
Originally 100 institutions were invited to participate in the study.
Of that group fifty responded favorably, but attrition and difficulties
with the schedule as set up reduced the final group to thirty-eight. In
making up the original list, only associations which were large enough
to have at least 100 delinquency accounts were included.
INSTRUCTION SHEETS: DELINQUENCIES ON SINGLE-FAMILY
CONVENTIONAL LOANS AT SAVINGS AND LOAN ASSOCIATIONS
Note. This study is restricted to conventional single-family home
loans. FHA and VA loans and loans on multiple-family properties are
not to be included in the sample.
We recognize that variations exist in loan procedures from one
association to another. Because of this fact, it is difficult to establish
rigid guidelines for this study. Therefore, we will cite the principles we
wish to hold to in the study and follow with a recommended, but
88
Mortgage Delinquency and Foreclosure
illustrative, method of proceeding. The officers supervising the local
work can then determine the most efficient method of getting the job
done in their own shop. We ask only that the person assigned to extract
the information from the loan files have working familiarity with the
loan records and procedures and not be simply a clerk. He, or she,
should review thoroughly the information in these instructions.
I. Defining a Delinquent Loan
A delinquent loan is defined as a loan in arrearage sixty days or
more. The loan is sixty days or more delinquent if the borrower
owes the equivalent of two monthly payments in the last twelve
months. You may follow the local practice regarding partial loan
payments. What we wish to guard against is including thirty day-
past due loans in our sample.
II. Drawing the Sample
A. Select at random 100 loans from the delinquent loan file. To
insure randomness, each eligible loan must have an equal chance
of being included in the study. Determine first the number of loans
eligible for the study. Remember to exclude the ineligible FHA,
VA and multi-unit property loans. If the number is 100 or less,
include every loan. If the number exceeds 100, you must sample
systematically. If the number of loans is 150, e.g., include two loans
and skip each third loan. If your association has 300 delinquent
loans, select one out of every three loans from a register or a
listing of such loans, or use the assembled ledger cards and select
every third card. If the association had 350 delinquent loans, you
would select two loans and skip five loans, etc. It may be that this
sampling could best be done in the Collections Department.
B. Select at random 100 loans from the current loan file. If you
have 7,000 loans on the books, then the sampling ratio would be
100/7000, or one out of 70. Typically, you would work through a
loan register, a similar listing, or the loan file itself and select every
nth loan, record the number of that account and include it in the
study. The account numbers of the loans included in the survey
may be recorded on a separate sheet, or directly on Worksheet A.
Remember, however, to keep the delinquent loans and the current
loans separate, because Worksheet B applies only to delinquent
loans.
III. Definitions—Worksheet A
Worksheet A is to be prepared from materials in the loan file for
all loans included in the survey—current and delinquent. All replies
TABLE A 1
WORKSHEET A:
DELINQUENCY STUDY—CONVENTIONAL SINGLE-FAMILY MORTGAGES
Name of Assn.
___________________________________________________________#
6f Loan
Delinquent
Location of Property
Current ___________________
(In City
;
Built-Up Suburb
; New Surburban Development
Check Appropriate Boxes or Fill in Blanks:
00
1.
Loan Terms:
Date Loan Closed*
Original Balance
$
Interest Rate
Service Charge*
$
Monthly Payment (Pl)*
$
2. Type of Loon:*
Original Borrower—Walk-in
Original Borrower—Brought in by Broker
Builder loan—assumed
Builder loan—substitued
Ordinary assumption
Ordinary substitution
-
3.
Loan and Property Characteristics:
Purchase Price of Home
$
Age of Home:*
Appraisal
$ New____________
Downpayment*
$
Used: 0 to
5 yrs. —
Maturity of Loan
5 to 10 yrs. —
Any Junior Financing?* Yes No
10 to 15 yrs._
Pledged Saving Acct.
16 and Over_
Other (Describe)
4
Age of Head of Household:
21 to 29
45 to 49
30 to 34
50 to 54
35 to 39
55 to 59
40 to 44 60 & over
5.
Marital Status:
Married
Widowed
Divorced
Single
6. Number of Dependents:
Number of Jobs*
Length of Time on
Main Job
TABLE Al (continued)
7.
Annual Income:
Husband $
Wages and Salary
Own Business
Other
Wife
$
/year
Wages and Salary
j Other
Other
$
/year
From
Other
$
/year From
8. Occupation:
Self-employed
Executive or Manager
Salesman
White-collar
Skilled Labor
Unskilled Labor
Other (Farmer, Military, etc.)
9. Purpose of Loan:*
Purchase
Repair and Improvement
Refinancing
Other (Specify)
10.
Credit Information:
Balance Sheet Info:
Yes
No
No Credit Report
Court Items:
Yes
No
Credit Info. by Bureau
Collections: Yes
No
Credit Info. by Assn.
Rating Given Borrower by Loan Interviewer:*
No. Jobs past 5 yrs. Excellent
Fair
Length of Time in State
Satisfactory
Poor
None
11.
Reference Information (Check applicable items):
No References Given
— Private Party
Trade-Retailers & Merchants
Complete:
Auto Finance Company
of References Given
Small Loan Company
..Number Checked
Bank and Mortgage Items
Other Comments:
*Instructions Define These Terms
March 1963
'0
Techniques, Questionnaires, Worksheets 91
must be facts available to loan officer at time of loan application,
approval, or closing. Remember to indicate whether each loan is
current or delinquent in the upper right-hand corner of the work-
sheet.
Location of Property. Place here the address of the property. This
item is important for identification purposes. We ask, if possible,
that a loan officer classify the loans as "In City," "Built-up Suburb,"
or "New Suburban Development."
Item 1. Date loan closed. Refers to date borrower incurred con-
tractual liability to association—the date of loan closing
for construction loans.
Service charge. Includes total of fees and charges, paid by
borrower, whether itemized or not. Credit report, appraisal,
and title fees are included. Enter dollar amount.
Monthly payment. Includes principal and interest. Escrow
payments are not included in this item.
Item 2. Type of loan:
Original borrower—brought in by broker. Borrower re-
ferred to association by real estate agent or builder.
Builder loan—assumed. Borrower assumed loan made
originally to homebuilder.
Builder loan—substituted. Borrower's loan, although a new
contract, was closely tied to (substituted for) the builder's
original loan on the same property.
Ordinary assumption. Borrower assumed loan made origi-
nally to another borrower.
Ordinary substitution. Borrower's loan, although a new
contract, was tied closely to (substituted for) an earlier
loan made by association to another borrower on the same
property.
Item 3. Down payment. The earnest money payment and other cash
transferred from buyer to seller. Item should appear on
settlement statement.
Any junior financing? Any additional borrowing to get the
downpayment or any additional collateral offered to make
the first mortgage possible. This can be by builder or other
third party as well as borrower. Includes pledged savings
account, notes, or agreements of builders, or any outside
party. Answer "yes" or "no." Where loan file provides
evidence that junior financing existed, indicate type of
secon4ary financing involved.
92
Mortgage Delinquency and Foreclosure
New home. Refers to home not previously occupied.
Used home. Previously occupied property.
Items 4, 5, 6 and 8. Refer to Head of Household.
Number of jobs. Refers to "moonlighting" by borrower.
Item 7. Annual income. Indicate dollar amount and whether total
comes from wages and salary, own business, or other
sources. If income of persons other than husband or wife
were noted, indicate source of such income.
Item 9. Purpose of loan:
Construction. Refers to long-term construction loan to
borrower.
Purchase. Home purchase. Also includes builder loans that
have been assumed or substituted by the home owner.
Repair and improvement. Loan where indicated purpose
is major alteration or improvement of property.
Refinancing. Loan written to repay or recast an existing
home mortgage debt, even if additional funds are granted
for other purposes.
Items 10 & 11. Credit information. Practice here will vary, depend-
ing on degree of reliance on outside credit agency. Recom-
mend that loan application and credit report be used
together in completing sections 10 and 11.
Rating by loan interviewer. Where a rating appears in loan
file
in writing, indicate evaluation. Where it does not,
check "None."
Number of references given and number checked. Item
refers to credit work done by association. Reply requires a
counting of references and a counting of the number
checked.
IV. Definitions—Worksheet B. (For delinquent loans only).
Present loan balance. As of March 1, 1963. Taken from loan ledger
card.
Number of payments in arrears. As of March 1, 1963. See definition
of delinquent loan at beginning of instructions. Partial payments
are to be handled according to association practice. If more than
50 per cent of a payment is overdue, most associations count this
as a missed payment.
Reason for delinquency. As ascertained in Collections Department.
Attitude of borrower. Indicate in capsule fashion essence of any
report or reports noted on records by collections personnel regard-
ing contact with borrower.
TABLE A2
WORKSHEET B:
DELINQUENCY STUDY—CONVENTIONAL SINGLE-FAMILY IYIORTGAGES
(To be Prepared by Collections Dept.)
Name of Assn.
of Loan
Present Loan Balance $
No. Payments in Arrears
Payment Experience:
Problems throughout loan life
Intermittent trouble
Good until recently, then
no payment
Other (
Reason for Delinquency:
lmpropei regard for obligations
Curtailment of income
Excessive obligations
Death or illness
Marital difficulties
Other reasons:
Attitude of borrower when contacted:
Other
94 Mortgage Delinquency and Foreclosure
Other comments. Might include notation regarding previous collec-
tion problems and how resolved; comments regarding changes in
borrower's situation since date of original loan.
V. Other Instructions
A. Time schedule. If workload permits, records research should be
conducted prior to March 15.
B. Completed worksheets. Hold for visit of League Field Service
Representative. He will review procedures followed and pick up the
worksheets.
C. Special procedures. If any are employed, please note these for
us. Such notations will be of great help in the editing which will
precede electronic processing.
Mortgage Bankers Association Data
PARTICIPATING INSTITUTIONS
The universe from which the sample was drawn consisted of the
regular reporters in the MBA's quarterly delinquency survey. As of
June 30, 1962, a year earlier than the actual survey date, there were
38 mutual savings banks, 102 commercial banks, and 256 mortgage
companies so reporting. For each institution, a ratio was computed of
the number of loans delinquent ninety days or more plus number of
loans in foreclosure to the total number of loans serviced. This ratio
was then used to compute variances and to estimate the required sample
size for each of the three types of institution. The ratio was also used
along with the number of loans in default to determine the within-
institution sampling rate. The schedule was:
Loans in Default
Sample Rate
0—25 1—1
26—60 1—2
61—100
1—3
100—150 1—4
150+
1—10
The
results of the sample determination process indicated that
it would be necessary to obtain a sample of 50 per cent of the reporters
in the mortgage company and commercial bank groups. Mutual savings
banks were selected on a one for one basis. These reporters, however
were merged with the National Association of Mutual Savings Banks
sample which will be discussed later.
The actual firms chosen were selected at random and responses
Techniques, Questionnaires, Worksheets
95
were excellent. Usable data were obtained from 36 of 38 savings
banks, 41 of 51 commercial banks, and 105 of 129 mortgage com-
panies. Because later checks revealed that mortgage companies had
been under-sampled, the blow-up factor for that group had to be
adjusted from 2.0 to 2.64.
QUESTIONNAIRE AND CODING INSTRUCTIONS
The Mortgage Bankers Association, of America conducted a survey of
the characteristics of delinquent mortgage loans, using data as of June
30, 1963. Table A3 lists the categories as they appeared on the ques-
tionnaire. Table A4 shows the format used in putting the data on punch
cards.
National Association of Mutual Savings Banks Data
PARTICIPATING INSTITUTIONS
The savings banks included in the NAMSB survey were selected basic-
ally on a random basis. The original list was then modified in order
to integrate it with that of the MBA so that the combined list would
reflect more accurately the distribution of savings banks with respect
to (1) geographical location (2) size (3) mortgage portfolio compo-
sition (FHA, VA, and conventional loans) and (4) the proportion of
delinquent loans to total loans.
Each institution in the NAMSB survey was sent instruction sheet
(1), (2), or (3), depending on the within-institution sampling rate
requested. This provided for a 1-2, 1-3, or a 1-7 loan sample of de-
linquent loans. In each case the banks were asked to select a number
of current loans equal to the number of delinquents reported on. The
purpose of using different sampling ratios was to minimize the report-
ing burdens' on the banks. Those having a larger number of delinquents
selected a smaller proportion.
Altogether data were secured on about 1250 delinquent loans
and an equal number of currents. This represents about 10 per cent
of the total population of delinquents as of the survey date. In all, 73
banks participated in the survey (combined MBA and NAMSB).
INSTRUCTION SHEET: CHARACTERISTICS OF DELINQUENT
MORTGAGE LOANS
Types of Loans Included. Report only on current and delin-
quent loans in the 1- to 4-family property classification or the most
closely corresponding property classification used by your institution.
Include only loans on property located in your own state.
TABLE A 3
Characteristics of Delinquent Mortgage Loans:
Mortgage Bankers Association, June 30, 1963a
Your Loan Number
Interest Rate
Type of Loan (check one)
Contract rate
FHA
Estimated yield to investor
VA
Original Monthly Payment (including escrows)
Conventional
Location (check one)
Status of Loan (check one).
Spot
Delinquent 90 days or more
Tract
In foreclosure
Property
Currency
County location
Service for:
Age (yrs. or new)
Life insurance company
Borrower—When Loan Was Closed
Savings bank
Monthly Income
Commercial bank
Primary
(code trust department 4)
Secondary
Trusteed funds
Total
FNMA
Liquid Assets (excluding downpayment)
Savings & loan association
Occupation
Own account
Professional or Technical
Individuals & others
Proprietors or Managers
Description of Original Loan
Clerical
Date loan was closed
Sales
Original selling price
Craftsmen & Foremen
Original loan
Skilled Labor, manufacturing
Term (mos.)
Skilled Labor, non-manufacturing
Services
Laborer
Number of Dependents (Including wife)
Age of Family Head
Monthly Payments (including escrows)
Principal Balance (4-30-63)
Est. Current Value of Property
Marital Status (check one)
Married
Single
Current Value-to-Selling-Price ratio
Number of Prior Delinquencies That Were Cured
History of Loan
Apply to Current Delinquent Problem Only
'o
Date of
First Unpaid Installment
First Contact
Number of Contacts
Letter
Phone
Personal
Reason For Delinquency
Death or illness in family
Family or marital problems
aThe questionnaire used by the National Associa-
tion of Mutual Savings Banks, dated December 31,
1963,
is almost identical
to
this questionnaire. It
differs
in only three respects: (1) The question re-
garding the institution for which the loan was serviced
Over-obligated, same income
Reduction in secondary income
Cost of home ownership increased
Increases in other living costs
Property unsatisfactory
Increase in dependents
Entered military service
Unable to sell or rent
Improper regard for obligations
Property abandoned
Describe Nature and Term of Forbearance, if any (if
necessary, explain on separate sheet and identify
by loan number)
Date Placed in Foreclosure
was dropped; (2) The question regarding the nature
and term of forebearance was dropped; and (3) Two
additional
employment categories were
added —
military
and retired.
TABLE A 4
Punch Card
Format,
Characteristics of Delinquent Mortgage Loansa
Respondent identification
Not reported
Region
Description of Loan (compute age of
State
mortgage as of 6/30/63
City
June 30, 1958 and earlier
Type of business
July—December 1958
Loan number
January—June 1959
Loan Identification
July—December 1959
Page
January—June 1960
Line
July—December 1960
Type of Loan
January—June 1961
FHA, 203
July—December 1961
FHA, 221
January—June 1962
FHA, other
July—December 1962
VA
January—June 1963
Conventional
Not reported
Combination
Original Selling Price
Not reported
Under $10,000
Status of Loan
$10,000—11,000
90-day delinquent
$11,000—12,000
In foreclosure
$12,000—13,000
Current
$13,000—14,Q00
Not reported
$14,000—15,000
Serviced for:
$15,000—16,000
Codes on form RD-3
$16,000—17,000
$ 17,000—18,000
$ 18,000—19,000
$19 ,000—20 ,000
$20,000 and over
Not reported
Original Loan Amount (compute loan to selling
price ratio and code; compute principal balance
to selling price ratio and code; compute
principal balance to market value ratio and code)
Less than 75 per cent
75—80 per cent
80—85 per cent
8 5—90 per cent
90—95 per cent
95 per cent and over
Not reported
Terms (months) (coiivert to years and code)
Less than 240 months
240—3 00 months
300—360 months
360 months or more
Not reported
Contract Interest Rate (round to nearest
.25 per cent)
4.00 per cent or less
4.25 per cent
4.50 per cent
4.75 per cent
5.00 per cent
5.25 per cent
5.50 per cent
5.75 per cent
6.00 per cent
6.25 per cent
6.50 per cent
7.00 per cent
More than 7.00 per cent
Not reported
Yield to Investor (same as contract interest
rate; round to nearest .25 per cent)
Original Monthly Payment (include escrow)
Current Monthly Payment (include escrow)
Less than $70
$70—80
$80—90
$90—100
$ 100—110
$1 10—120
$120—140
$140— 150
$150
and above
Type
of Transaction
Spot
Tract
Not reported
County (alphabetical within alphabetical
listing of states, see Rand McNally)
Age
New
Less than 1 year
1—2
years
2—5
years
5—10 years
10
years and older
Existing
Not reported
Monthly Income
Primary, original
Primary, current
Total, original
Total, current
Not reported
(compute ratio of monthly income to
monthly payment and code)
Less than 5 per cent
5—10 per cent
10—15 pet cent
15—20 per cent
20—25 per cent
25—30 per cent
30—35 per cent
35 per cent or more
Not reported
Liquid Assets, Original
Liquid Assets, Current
(compute ratio of liquid asset to monthly payment)
Less than 1 (or modest) (or small)
1—2
2—3
3—4
4—5
5—10
10 or more
Not reported
Occupation, Original Borrower
Occupation, New Borrower
Marital Status, Original Borrower
Marital Status, New Borrower
Married
Single
Divorced
Widowed
Separated
Not reported
Number of Dependents (include wife)
Original borrower
New borrower
Not reported
Age of Head of Family, Original Borrower
Age of Head of Family, New Borrower
Less than 25 years
25—SO years
30-45 years
35—40 years
40—45 years
45—50 years
50—60 years
60 years or more
Not reported
Borrower
Same
New
Not re parted
Estimated Current Value of Property (compute ratio
of current value to original selling price and code)
100 per cent or more
95—100 per cent
90—95 per cent
85—90 per cent
80—85 per cent
75—80 per cent
Less than 75 rer cent
Not reported
Number of Prior Delinquencies
Many, numerous or several
Chronic
Not reported
Date of First Default (compute period from
June 30,
1963)
May and June 1963
April 1963
March 1963
February 1963
July 1962 through January 1963
12—18 months
18 months Or more
Not reported
Date of First Contact With Borrower (compute
per.iod from date of first default)
Less than 1 week
1—2 weeks
2—3 weeks
3—4 weeks
4—8 weeks
8—12 weeks
12 weeks or more
Not reported
Number of Contacts Made By Letter
Number of Contacts Made By Phone
Number of Personal Contacts
Constant
Several
Numerous
Many
Not reported
Reason for Delinquency of Forbearance (code
on RD-3 form)
Not reported
Forbearance, Type or Nature of:
Satisfied or about to be; removed from
foreclosure
Pending sale
Pending recovery from illness, imminent
death, death
Pending receipt of other sources of income
Practiced forbearance, type undefined
Impossible to forbear
Repayment program
None
Not reported
Foreclosures (compute months
Not in foreclosure
June 1963
May 1963
April 1963
March 1963
February 1963
January
1963
Not reported
in foreclosure status)
aCoded for a survey conducted by Mortgage Bankers Association of America, June30, 1963.
Techniques, Questionnaires, Worksheets
103
Delinquent Loans.
A sample of the delinquent loans reported
by the bank as of December 31, 1963, in the NAMSB Quarterly Mort-
gage Delinquency Survey. This includes loans which are three or more
payments overdue on a monthly program or one or more payments
overdue on a quarterly program. Includes also all loans in the process
of foreclosure as of December 31, 1963.
Current Loans. A sample of current loans held on December
31, 1963 equal to the number of delinquent loans, selected according
to the procedures outlined below.
Selecting Samples of Current and Delinquent Loans
Note: To reduce the reporting burden, the following procedures
were designed to select a sample of loans. To assure reliability, it is
important that this procedure be followed without deviation.
1. On a separate worksheet, simply list the number and type of
each 1- to 4-family loan that was reported as delinquent in
the Mortgage Delinquency Survey on December 31,
1963
(FHA, VA, and conventional).
2. On this worksheet, place a check beside the first, fourth, and
seventh loan, continuing to the end of the list, checking every
third loan.1
3. Alongside each loan checked on the worksheet, enter the next
consecutive number of a loan that is current and of the same
type (see example below, as to breakdown by type of loan)
as the delinquent loan or loan in foreclosure.
Loans Delinquent 90 Days
or More or in Foreclosure Current Loans
Loan Number Type of Loan Loan Number Type of Loan
8,543 V
FHA, 203b 8,544
FHA, 203b
10,782
VA
9,543
Conventional
12,492V
VA
12,4952
VA
6,781
FHA, 203i
392 FHA, 203b
4,00li- FHA, 203b
4,002
FHA, 203b
1
The
other two worksheets differ only in the sampling techniques (one
asks that every other delinquent loan be checked; the other calls for every
seventh delinquent loan).
2
Intervening
loans 12,493 and 12,494 are not VA.
104
Mortgage Delinquency and Foreclosure
4. Post the loan numbers of the delinquent loans and the loans
in foreclosure that were checked, as well as all current loans
listed to the first column of the reporting form provided.
Selected Definitions
1. Type of Loan.
Consider a combination FHA-VA loan as
one loan and report as FHA.
2. Borrower—When Present Delinquency Developed.
Regard-
less of legal arrangement and liability under the mortgage contract,
if a new borrower has, in effect, assumed responsibility for the mort-
gage prior to present delinquency, check "new" and supply as much
of the indicated information as is available in your collection depart-
ment.
3. Primary and Secondary Income. Primary income is
the
total income of the head of the household as shown in your records.
Secondary income is total income of other members of the household.
4. Liquid Assets. Generally speaking, total amount of liquid
assets (such as bank deposits, savings and loan share accounts, U.S.
Savings Bonds) held by borrower, as shown in your records.
5. County Location of Property. For areas where primary
political subdivision is not a county, then enter designation of the
equivalent political subdivision, such as a township.
Notes
1. Please answer all questions from current records. Do not seek
additional information beyond that already in your files.
2. Answer each question; if data are not available, enter N.A.
3. Enter all information directly on the questionnaire and sepa-
rate worksheet used to select sample of loans. Information may be
written by hand.
Kindly send one copy of the completed forms and the worksheet
list prepared to select the loans by Friday, February 21, 1964,
if
possible to: Research Department; National Association of Mutual
Savings Banks; 200 Park Avenue, New York, N.Y. 10017.
