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Mortgage delinquencies see big drop at the end of 2012

Mortgage delinquencies see big drop at the end of 2012

Delinquency rate typically rises in Q4

The national mortgage delinquency rate dropped sharply at the end of 2012, the Mortgage Bankers Association (MBA) said in a recent report.

According to the MBA’s National Delinquency Survey, the rate of delinquent mortgage loans (one- to four-unit residential properties) dropped to 7.09 percent at the end of the fourth quarter (Q4) 2012.

This 7.09 percent rate is a drop from 7.40 percent in the third quarter (Q3) of 2012 and a drop from 7.58 percent a year earlier in Q4 2011. Additionally, the Q4 2012 rate is the lowest national mortgage delinquency rate since 2008.

“We are seeing large improvements in mortgage performance nationally and in almost every state,” Jay Brinkmann, MBA Chief Economist and Senior Vice President of Research, said in a statement. “The 30 day delinquency rate decreased 21 basis points to its lowest level since mid-2007.”

Brinkmann continued: “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.”

Foreclosures drop, too

In addition to a drop in the delinquency rate, there was also a drop in the percentage of loans in the foreclosure process in Q4 2012.

The share of mortgage loans on which foreclosure actions were started dropped to 0.70 percent in Q4, down from 0.90 percent in Q3. The 0.70 percent mark is also down from 0.99 percent in Q4 2011 and it is the lowest level seen since the second quarter (Q2) of 2007.

“The foreclosure starts rate decreased by the largest amount ever in the MBA survey and now stands at half of its peak in 2009,” Brinkmann said. “Similarly, the 33 basis point drop in the foreclosure inventory rate is also the largest in the history of the survey.”

Posted in: Home Equity, Loans, Mortgage, Refinance

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