The delinquency rate for mortgages on one-to-four-unit residential properties fell to a seasonally adjusted rate of 7.09% at the end of the fourth quarter of 2012, decreasing 31 basis points from the previous quarter, and down 49 basis points from a year ago.
The 4Q12 delinquency rate levels are the lowest since 2008, according to the Mortgage Bankers Association’s National Delinquency survey.
The non-seasonally adjusted delinquency rate also dropped 13 basis points to 7.51%, down from 7.64% last quarter.
The amount of loans on which foreclosure actions started during the fourth quarter was 0.70%, the lowest level since the second quarter of 2007. This is down 20 basis points from last quarter and also down 29 basis points from one year ago, MBA noted.
"We are seeing large improvements in mortgage performance nationally and in almost every state. 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," said Jay Brinkmann, MBA’s Chief Economist and Senior Vice President of Research.
He added, "The foreclosure starts rate decreased by the largest amount ever in the MBA survey and now stands at half of its peak in 2009. Similarly, the 33 basis point drop in the foreclosure inventory rate is also the largest in the history of the survey."
The serious delinquency rate was 6.78%, a decrease of 25 basis points from last quarter, and a decrease of 95 basis points from last year.
"One cautionary note is that the 90-plus delinquency rate increased by 8 basis points, reversing a fairly steady pattern of decline and the largest increase in this rate in three years," Brinkmann said.
He added, "While we normally see an increase in this rate in individual states when they change their foreclosure laws, 38 states had increases in the percentage of loans three payments or more past due, indicating that we could see a modest increase in foreclosure starts in subsequent quarters."
Additionally, the combined percentage of loans at least one payment past due or in foreclosure was 11.25% on a non-seasonally adjusted basis, a 46 basis point decrease from last quarter and a 128 basis points decrease from the same quarter one year ago.
The performance of Federal Housing Administration loans is mixed. On a seasonally adjusted basis, the overall delinquency rate decreased for all loan types except FHA loans, MBA stated.
The seasonally adjusted delinquency rate decreased 26 basis points to 3.79% for prime fixed loans and decreased 68 basis points to 8.02% from prime adjustable-rate mortgage loans, from 3Q12 to 4Q12.
Over the past year, the non-seasonally adjusted foreclosure starts rate decreased 24 basis points for prime fixed loans, 86 basis points for prime ARM loans and two basis points for FHA loans, MBA noted.