The delinquency rate (30 days or more past due) for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.77% of all loans outstanding at the end of the fourth quarter, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
It was the lowest national delinquency rate since the third quarter of 2006.
The delinquency rate decreased 22 basis points from the previous quarter and 91 basis points from the fourth quarter of 2014, according to the report, which does not include loans in the process of foreclosure with the delinquency rate.
About 0.36% of all loans saw foreclosure starts during the fourth quarter – a decrease of two basis points from the previous quarter and a decrease of 10 basis points from one year earlier. It was the lowest foreclosure starts rate since the second quarter of 2003.
As of the end of the fourth quarter, about 1.77% of all loans were in some stage of foreclosure – down 11 basis points from the third quarter and down 50 basis points compared with the fourth quarter of 2014.
About 3.44% of mortgages were seriously delinquent (90 days or more past due) at the end of the fourth quarter – a decrease of 13 basis points compared with the previous quarter and a decrease of 108 basis points compared with a year earlier.
Both the foreclosure inventory rate and the serious delinquency rate were the lowest they’ve been since the third quarter of 2007.
“As the job market has improved and national home prices have rebounded, fewer borrowers were becoming seriously delinquent, while borrowers previously behind on their payments were in a better position to pursue alternative options to resolve delinquent loans,” says Marina Walsh, vice president of industry analysis for the MBA, in a statement. “The overall delinquency rate fell to pre-recession levels and, at 4.8 percent, was lower than the historical average of 5.4 percent for the time period 1979 to 2015. The rate at which new foreclosures were started decreased to 0.36 percent, the lowest rate since 2003 and only one-fourth of the record high level during the worst of the foreclosure crisis in the third quarter of 2009.
“Mortgage performance is closely connected to job market health, and most states saw employment growth continue over the past year,” she adds. “However, there were increases in the foreclosure starts rate in a handful of states that have economies closely tied to the oil industry. Out of 12 states that had an increase in foreclosure starts in the fourth quarter, five of those were in states with oil-dependent local economies. Oklahoma, North Dakota, Louisiana, Colorado and Texas saw increases in new foreclosures while the national average continued to trend lower.”