Mortgage delinquencies were down to a seasonally adjusted rate of 5.54 percent of all loans outstanding at the end of the first quarter of 2015, the lowest level since the second quarter of 2007.
The delinquency rate decreased 14 basis points from the previous quarter, and 57 basis points from 6.11 percent one year ago, according to the Mortgage Bankers Association’s latest National Delinquency Survey.
The delinquency rate covers loans that are at least one payment past due, but does not include loans in the process of foreclosure.
The percentage of loans in the foreclosure process by the end of the first quarter of 2015 was 2.22 percent, down five basis points from the fourth quarter of 2014 and 43 basis points lower than 2.65 percent during the same quarter one year ago. This was the lowest foreclosure inventory rate since the fourth quarter of 2007.
The percentage of loans on which foreclosure actions were started during the first quarter was 0.45 percent, a decrease of one basis point from the previous quarter, and was unchanged compared to the first quarter of 2014.
Loans 90 Days Past Due Also Decreasing
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 4.24 percent, a decrease of 28 basis points from the previous quarter, and a decrease of 80 basis points from 5.04 percent in the first quarter of 2014.
“Delinquency rates and the percentage of loans in foreclosure continued to fall in the first quarter and are now at their lowest levels since 2007,” said Joel Kan, MBA’s Associate Vice President of Industry Surveys and Forecasting. “The job market continues to grow, and this is the most important fundamental improving mortgage performance. Additionally, home prices continued to rise, as did the pace of sales, thus increasing equity levels and enabling struggling borrowers to sell if needed.”
The foreclosure inventory rate has decreased in the last twelve quarters. The rate, at 2.22 percent, was about half of where it was at its peak in 2010.
“With a declining 90+ day delinquency rate and the improving credit quality of new loans, we expect that the foreclosure inventory rate will continue to decline in coming quarters,” Kan said.