According to the Mortgage Bankers Association, the percentage of consumers who are mortgage delinquent had reached its lowest since the end of 2007.
A Washington, D.C.-based trade group reported last November 14 that the delinquency rate for mortgage loans has dropped to 5.85%, a seasonally adjusted rate of all loans outstanding at the end of this year’s third quarter.
This has been the sixth straight quarter where the number of mortgage delinquencies continues to drop based on the MBA’s National Delinquency Survey.
MBA reports that the delinquency rates comprise of loans that are at least one payment past due but does not include loans within the foreclosure process. The percentage of loans within the process of foreclosure at the end of the third quarter was 2.39%, which is down 10 basis points from the second quarter and 69 basis points from 2013.
“Delinquency rates and the percentage of loans in foreclosure fell to their lowest levels since 2007,” MBA’s Chief Economist Mike Fratantoni said. “We are now back to pre-crisis levels for most measures. Foreclosure starts were unchanged on a seasonally adjusted basis, but increased slightly in the raw data.”
“Given that this measure reached the lowest level in eight years last quarter, and given the continued decline in delinquency and foreclosure inventory rates, we expect that the increase in the unadjusted starts rate is just regular seasonal fluctuation,” he added.
Fratantoni claims that the delinquency rate fell by 15 basic points from the last quarter and declined 100 basis points since 2013.
Most of the seriously delinquent loans, either more than 90 days late or in the foreclosure process were mainly loans done before the downturn. In fact, 74% of them were made in 2007 or before that.
“Loans made in recent years continue to perform extremely well due to the improving market and tight credit conditions; loans originated in 2012 and later accounted for only four percent of all seriously delinquent loans,” Fratantoni said.