The delinquency rate for mortgage loans on residential properties in Illinois was 8.33 percent at the end of the fourth quarter of 2011, a decrease of 21 basis points from the third quarter of 2011, according to the Mortgage Bankers Association (MBA). The delinquency rate excludes loans in the process of foreclosure. The percentage of loans in Illinois on which foreclosure was started during the quarter fell two basis points to 1.31 percent, while the percentage of loans in the foreclosure process at the end of the quarter rose 12 basis points to 7.41 percent.
These rates are not seasonally adjusted. Mortgage delinquency rates normally increase from the third to the fourth quarter of the year due to a variety of seasonal factors, for example, holiday spending and heating bills. As noted in recent quarters, the percentage of loans in the foreclosure process is significantly affected by the foreclosure regime of the specific state. Overall, states with a judicial foreclosure system are seeing a buildup of loans in the foreclosure process, while most states with a non-judicial process are seeing declines. This is despite a relatively even distribution of increases in new foreclosures started across all states, judicial or non-judicial.
The delinquency rate for prime adjustable-rate mortgages (ARMs) decreased 101 basis points to 7.61 percent and the rate for prime fixed rate mortgage loans decreased 13 basis points to 4.52 percent. The delinquency rate for the sub-prime ARMs decreased 204 basis points to 21.6 percent, while the rate for sub-prime fixed rate loans decreased 56 basis points to 22.53 percent. The delinquency rates for FHA and VA loans were 15.63 percent and 8.26 percent, respectively—up 35 basis points for FHA loans and down two basis points for VA loans.
The foreclosure starts rate for prime ARMs in Illinois decreased 5 basis points to 1.91 percent, while the rate for prime fixed rate loans decreased 2 basis points to 0.87 percent. The foreclosure starts rate for sub-prime ARMs decreased 80 basis points to 4.11 percent, while the rate for sub-prime fixed rate loans decreased nine basis points to 2.95 percent.
The percentage of prime ARMs in foreclosure increased 20 basis points to 12.57 percent and decreased three basis points to 4.53 percent for prime fixed rate loans. The rate for sub-prime ARMs increased 10 basis points to 29.61 percent, while the rate for sub-prime fixed rate loans increased two basis points to 15.58 percent. The percentage of FHA loans in foreclosure increased 73 basis points to 7.17 percent. The percentage of VA loans in foreclosure increased 44 basis points to 4.83 percent.
Among the 50 states and the District of Columbia, Illinois ranked 22nd in delinquencies and fifth in foreclosures started. Mississippi ranked first in delinquencies with a rate of 13.13 percent and Florida ranked first in foreclosure starts with a rate of 1.68 percent.
On a national level, the delinquency rate for mortgage loans on one- to four-unit residential properties was 8.15 percent on a non-seasonally adjusted basis, down five basis points from 8.20 percent in the third quarter of 2011. The seasonally adjusted delinquency rate on residential properties was 7.58 percent in the third quarter, down 41 basis points from last quarter’s seasonally adjusted rate. The non-seasonally adjusted percentage of loans on which foreclosure was started during the quarter decreased nine basis points to 0.99 percent, while the non-seasonally adjusted percentage of loans in the foreclosure process at the end of the quarter decreased five basis points to 4.38 percent.