Foreclosure and Delinquency Rates at Lowest Level in Six Years
At the end of the fourth quarter of 2013, delinquency rates for home mortgage loans on 1-4 unit properties were at a six-year low. The seasonally adjusted rate of 6.39% of all home mortgage loans outstanding was at the lowest level since 2008, decreasing 2 basis points from the previous quarter and 70 points from this time last year.
These figures regarding foreclosure and delinquency rates are from the Mortgage Bankers Association (MBA) National Delinquency Survey, one of the most recognized sources for residential home mortgage loan delinquency and foreclosure rates. The rates include home mortgage loans that are at least one payment past due. It does not account for home mortgage loans that are in the process of foreclosure. Loans that are in the foreclosure process were down 2.86% at the end of the fourth quarter of 2013, 22 basis points from the third quarter and 88 basis points lower a year ago. The foreclosure inventory rate is the lowest it has been since 2008.
Michael Frantantoni, MBA’s Chief Economist and Senior Vice President of Research and Industry Technology said, “We continue to see substantial improvement in both delinquency and foreclosure rates, with most measures now back to pre-crisis levels.”
Frantantoni went on to say that the delinquency rate is more than 3 percentage points lower than its peak of over 10% in 2010. The rate is nearing historical averages of around 5%. Home mortgage loans in foreclosure have fallen for the 7th straight quarter and the percentage of foreclosures that have been started is at 0.54%, the lowest in 8 years.
Across the United States, there have been vast improvement in foreclosure rates in the fourth quarter. 49 states and the District of Columbia have recorded decreases in defaults on home mortgage loans. According to Frantantoni, “Florida still leads the nation in the percentage of loans in foreclosure, but that percentage has fallen to 8.56 percent from a peak of 14.5 percent. Loans originated in 2007 and earlier accounted for 75% of the seriously delinquent loans, while 2008 and 2009 loans accounted for another 16%.”
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