Mortgage Delinquencies Fall Across the Board

February 17, 2011 No Comments »

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The residential mortgage delinquency rate fell to a seasonally adjusted 8.22 percent in the fourth quarter, according to the Mortgage Bankers Association‘s (MBA) National Delinquency Survey released today.

It decreased from 9.13 percent in the third quarter and 9.47 percent a year ago, signaling that the worst is potentially behind us.

Meanwhile, foreclosure actions were started on 1.27 percent of loans, down from 1.34 percent in the third quarter, but up from 1.20 percent a year ago.

The percentage of loans in the foreclosure process at the end of the fourth quarter increased from 4.39 percent to 4.63 percent, and was up slightly from a year ago.

That brought the combined percentage of loans in foreclosure or at least one mortgage payment past due to 13.56 percent (on a non-seasonally adjusted basis), down from 13.78 percent last quarter and 15.02 percent a year ago.

MBA chief economist Jay Brinkmann noted that total delinquencies are at their lowest level since the end of 2008, and mortgages just a single payment behind are at the lowest level since the end of 2007.

“Perhaps most importantly, loans three payments (90 days) or more past due have fallen from an all-time high delinquency rate of 5.02 percent at the end of the first quarter of 2010 to 3.63 percent at the end of the fourth quarter of 2010, a drop of 139 basis points or almost 28% over the course of the year,” he said, in the report.

However, the percentage of loans in foreclosure equaled the all-time high, which the MBA attributed to the robosigning scandal that caused a temporary halt in foreclosure sales.

In Florida, over 24 percent of mortgages are one payment or more past due or in foreclosure, the highest rate in the nation, followed closely by Nevada at over 22 percent, and well above the 13.56 percent national average.

Compared to the fourth quarter of 2010, the delinquency rate decreased 135 basis points for prime fixed mortgages, 124 basis points for prime adjustable-rate mortgages, 284 basis points for subprime fixed mortgages, 152 basis points for subprime ARM mortgages, 154 basis points for FHA loans, and 91 basis points for VA loans.

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