The national delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 5.54% of all loans outstanding at the end of the first quarter – the lowest level since the second quarter of 2007 – according to the Mortgage Bankers Association's (MBA) National Delinquency Survey.
The delinquency rate, including loans at least one payment past due but not including loans in the process of foreclosure, decreased 14 basis points from the previous quarter and 57 basis points from one year ago.
About 2.22% of mortgages were in some state of foreclosure at the end of the first quarter – down five basis points from the fourth quarter of 2014 and down 43 basis points from the same quarter one year ago. This was the lowest foreclosure inventory rate since the fourth quarter of 2007.
The percentage of loans on which foreclosure actions were started during the first quarter was 0.45% – a decrease of one basis point from the previous quarter and unchanged compared to the first quarter of 2014.
The serious delinquency rate – the percentage of loans that are 90 days or more past due or in the process of foreclosure – was 4.24%, a decrease of 28 basis points from the previous quarter and a decrease of 80 basis points from the first quarter of 2014.
‘Delinquency rates and the percentage of loans in foreclosure continued to fall in the first quarter and are now at their lowest levels since 2007,’ says Joel Kan, the MBA's associate vice president of industry surveys and forecasting.
‘The job market continues to grow, and this is the most important fundamental improving mortgage performance. Additionally, home prices continued to rise, as did the pace of sales – thus increasing equity levels and enabling struggling borrowers to sell if needed.
‘At the state level, 27 states saw a decline in foreclosure inventory rates over the quarter. New Jersey, New York and Florida had the highest percentage of loans in foreclosure in the nation in the first quarter. Florida's foreclosure inventory rate peaked at 14.5 percent in 2010 and was down to 4.8 percent in the most recent quarter – helped by rapidly improving local economies and job markets, leading to increased housing demand, strong home price growth and more opportunities for distressed loans to be resolved,’ Kan says.