The delinquency rate for mortgage loans on one- to four-unit residential properties fell to a seasonally adjusted rate of 7.09% of all loans outstanding at the end of the fourth quarter of 2012, the lowest level since 2008, according to new data from the Mortgage Bankers Association (MBA). The fourth quarter witnessed a decrease of 31 basis points (bps) from the previous quarter, and was down 49 bps from one year ago.
The serious delinquency rate – the percentage of loans 90 days or more past due or in the process of foreclosure – was 6.78% in the fourth quarter, a decrease of 25 bps from the third quarter and down 95 bps from the fourth quarter of 2011.
While delinquency rates typically increase between the third and fourth quarters of the year, even the non-seasonally adjusted delinquency rate dropped 13 bps to 7.51% in the fourth quarter from 7.64% in the previous quarter. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure.
The percentage of loans on which foreclosure actions were started during the fourth quarter was 0.70%, the lowest level since the second quarter of 2007, while the percentage of loans in the foreclosure process at the end of the fourth quarter was 3.74%, the lowest level since the fourth quarter of 2008
‘We are seeing large improvements in mortgage performance nationally and in almost every state,’ says Jay Brinkmann, MBA's chief economist and senior vice president of research. ‘With fewer new delinquencies, the foreclosure start rate and foreclosure inventory rates continue to fall and are at their lowest levels since 2007 and 2008 respectively.’