The latest US National Delinquency Survey by the Mortgage Bankers Association shows that the delinquency rate on mortgages covering 1-4 residential properties fell to a seasonally adjusted rate of 7.09% at the end of Q4 last year. This is not only a decrease of 31 basis points on the quarter and a decrease of 49 basis points on the year, but is also the lowest level recorded by the survey since 2008.
In this case, one could call the seasonally adjusted data askew, because it is adjusted to factor in a typical rise in delinquencies in the second half of the year. However, according to the latest report even the non-seasonally adjusted data shows a 13 basis point drop to 7.51% in Q4 from 7.64 in Q3.
It is also important to mention that the delinquency rate does not show mortgages that are in any stage of the foreclosure process, it simply covers loans that are at least one payment behind. However, the foreclosure rate is also in continued decline according to the latest data.
According to the MBA delinquency survey the percentage of loans on which foreclosure actions were started during the fourth quarter was 0.70 percent, the lowest level since the second quarter of 2007, down 20 basis points from last quarter and down 29 basis points from one year ago. The percentage of loans in the foreclosure process at the end of the fourth quarter was 3.74 percent, the lowest level since the fourth quarter of 2008, down 33 basis points from the third quarter and 64 basis points lower than one year ago.
The serious delinquency rate, the percentage of loans 90 days or more past due or in the process of foreclosure also fell 25 basis points in Q4 compared to Q3 and 95 basis points compared to Q4 2011 at 6.78 percent.
"We are seeing large improvements in mortgage performance nationally and in almost every state. The 30 day delinquency rate decreased 21 basis points to its lowest level since mid-2007. 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," said Jay Brinkmann, MBA's Chief Economist and Senior Vice President of Research.
- Thursday 28 February 2013