The overall delinquency rate on
mortgage loans has now fallen below historic average levels. The Mortgage
Bankers Association (MBA) said on Thursday that 4.77 percent of all mortgage
loans on one-to-four-unit residential properties were at the end of the fourth
quarter of 2015. That rate is a seasonally adjusted one.
The rate, gathered through MBA's
National Delinquency Survey, represented a decrease of 22 basis points from the
third quarter and 91 from the delinquency rate in the fourth quarter of
2014. It was the lowest level recorded
by MBA since the third quarter of 2006. The delinquency rate includes
loans that are at least one payment past due but does not include loans in the
process of foreclosure.
Foreclosures were begun on
properties at a rate of 0.36 percent, down 2 basis points from the previous
quarter and 10 from the previous year. This start rate was the lowest since the
second quarter of 2003.
Loans in the foreclosure process, sometimes referred to as the foreclosure
inventory, were at a rate of 1.77 percent at the end of the fourth
quarter. That was 11 basis points below
the inventory at the end of the third quarter and 50 points lower than on
December 31, 2014. The foreclosure inventory has not been that low since the
third quarter of 2007.
Serious delinquencies, loans that
are 90 or more days past due, including those in foreclosure, represented 3.44
percent of all mortgages, the lowest rate since the third quarter of 2007. The rate was a 13 basis point decrease
quarter-over-quarter and 108 points year-over-year.
Marina Walsh, MBA's Vice President
of Industry Analysis, said "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.
Walsh noted that the overall delinquency rate is now back 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 said. "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
"Foreclosure inventory rates continued to decline in both judicial and
non-judicial states. New Jersey and New York, which lead the nation in
foreclosure inventory rates, had the largest year-over-year declines in their