The Mortgage Bankers Association (MBA) released its National Delinquency Survey Thursday, reporting the seasonally adjusted rate for delinquent mortgages is 6.39 percent, the lowest level since 2008.
The figure represents mortgage loans for 1 to 4 unit residential properties, and takes into account all loans outstanding at the end of the fourth quarter of 2013. Any loans that are at least 1 payment past due are counted in the delinquency rate, but not loans that are in the process of foreclosure.
The rate for loans in the foreclosure process was reported as 2.86 percent, down 22 basis points from the third quarter. The figure was 88 basis points lower than last year.
“We continue to see substantial improvement in both delinquency and foreclosure rates, with most measures now back to pre-crisis levels,” said Michael Fratantoni, MBA’s Chief Economist and SVP of Research and Industry Technology. “The delinquency rate, at 6.39 percent, is more than 3 percentage points lower than its peak of over 10 percent in 2010 and is edging closer to the historical average of around 5 percent.”
Fratantoni continued, “The percentage of loans in foreclosure has fallen for the seventh consecutive quarter, decreasing to 2.86 percent, the lowest level in 6 years. The percentage of new foreclosures started, at 0.54 percent, is the lowest in 8 years and is back within its typical historical range.”
The .54 percent rate of non-seasonally adjusted foreclosure starts is the lowest level since 2006.
The percentage of loans that are 90 days or more past due or in the foreclosure process was 5.41 percent, representing a 24 basis point decrease from last quarter, and a decline of 137 basis points from Q4 2012.
The report notes that most of the seriously delinquent loans are remnants from the housing crisis.
“Loan cohorts from 2009 and earlier continue to make up more than 90 percent of seriously delinquent loans,” Fratantoni said. “Loans originated in 2007 and earlier accounted for 75 percent of the seriously delinquent loans, while loans originated in 2008 and 2009 accounted for another 16 percent. This is important to note because current home prices, while still rising, are about 9 percent below the peak in 2007.”
Statewide, 49 states and the District of Columbia recorded a decrease in foreclosure rates. Florida leads the nation with a foreclosure rate of 8.56 percent. New Jersey and New York had the next 2 highest rates, but both states recorded a decline in foreclosure rates from the previous quarter.