The mortgage delinquency rate has fallen 71 basis points from just one year ago. The delinquency rate includes loans that are at least one payment past due; it does not include loans in the foreclosure process.
In the fourth quarter, the percentage of loans in the foreclosure process fell 12 basis points compared to the previous quarter, standing at 2.27 percent, MBA reports.
“Delinquency rates and the percentage of loans in foreclosure decreased for another quarter and were at their lowest levels since 2007,” says Marina Walsh, MBA’s vice president of industry analysis. “We are now back to pre-crisis levels for most measures.”
The foreclosure inventory has fallen every quarter since the second quarter of 2012. Forty-five states saw a decline in their foreclosure inventory rates during the fourth quarter, but judicial states continue to account for a disproportionately high share, Walsh notes. States that use a judicial foreclosure process have a foreclosure inventory rate that is about three times that of non-judicial states, she adds.
Overall, “we expect the improvement in mortgage performance to continue due to the improving economy and a strengthening job market, and the improved credit quality of recent vintages,” Walsh says.