The delinquency rate for mortgages on one-to-four unit residential properties grew 16 basis points from the fourth quarter of 2012 to the first quarter of 2013 even as the nation’s foreclosure inventory rate dropped to 3.55%, the Mortgage Bankers Association said Thursday.
Mortgages in this category reached a seasonally adjusted delinquency rate of 7.25% of all loans outstanding in the first quarter – a rate that is still down 15 basis points from a year ago, MBA concluded in its National Delinquency Survey.
The trade group’s delinquency rate includes mortgages that are at least one payment past due, but not those in the process of foreclosure.
The percentage of loans experiencing the start of a foreclosure action remained unchanged in 1Q at 0.70% — the lowest level reached since the second quarter of 2007 and a 26 basis point drop from a year ago.
By the end of the third quarter, 3.55% of loans were in the foreclosure process, down 19 basis points from the fourth quarter and 84 basis points from the same period of 2012, MBA said.
Meanwhile, the percentage of loans 90 days or more past due or moving through the foreclosure process hit 6.39%, a decline of 39 basis points from the previous quarter and a drop of 105 basis points from the first quarter of 2012.
The combined percentage of loans at least one payment late or in foreclosure fell to its lowest level in four years, reaching 10.30% — a 95 basis point drop from the fourth quarter and 103 basis points lower than 1Q of 2012.
"On a seasonally adjusted basis, the overall delinquency rate increased this quarter, driven by a slight increase in the 30-day delinquency rate. Normal seasonal patterns are beginning to re-emerge, but as has been true post-crisis, it is still difficult to parse typical seasonal swings from true changes in performance," said Michael Fratantoni, vice president of research and economics for the MBA.
"It is also important to note the decline relative to last year at this time. Regardless, we remain in a period of slow and uneven economic and job growth in the U.S. and there are still many borrowers without stable, full time employment, or that are still unemployed."
The percentage of loans in foreclosure declined in both judicial and nonjudicial foreclosure states, but judicial foreclosures – which generally take longer – continue to have more loans moving through the pipeline with the average foreclosure rate at 5.96% in 1Q, compared to the 1.99% average rate in nonjudicial states.
Still, judicial foreclosure states are seeing their lowest foreclosure inventory rate since the fourth quarter of 2009.
Among loan types, FHA loans saw the largest improvement in delinquencies, but that news was dampened a bit by the same loan category experiencing an 8-basis point uptick in foreclosure starts and an 11-basis point rise in inventory.
"The pre-2010 vintages continue to drive FHA serious delinquencies, with the 2008 and 2009 loan cohorts still accounting for 44% of seriously delinquent FHA loans even though they represent only 27% of FHA loans serviced," MBA said.
"In contrast, the 2010 and later vintages made up 15% of seriously delinquent FHA loans, but are almost half of all FHA loans serviced. Foreclosure starts and inventory rates on subprime loans dropped sharply over the quarter and relative to last year," the trade group added.