The delinquency rate for mortgage loans on residential properties in California was 7.22 percent at the end of the fourth quarter of 2011, a decrease of 46 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 California on which foreclosure was started during the quarter fell 29 basis points to 1.16 percent, while the percentage of loans in the foreclosure process at the end of the quarter fell 21 basis points to 3.45 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 161 basis points to 11.68 percent and the rate for prime fixed rate mortgage loans decreased 10 basis points to 3.90 percent. The delinquency rate for sub-prime ARMs decreased 190 basis points to 22.90 percent, while the rate for sub-prime fixed rate loans decreased 86 basis points to 17.80 percent.
The delinquency rates for FHA and VA loans were 8.33 percent and 5.18 percent, respectively—up 47 basis points for FHA loans and up 26 basis points for VA loans.
The foreclosure starts rate for prime ARMs in California decreased 66 basis points to 2.33 percent, while the rate for prime fixed rate loans decreased 19 basis points to 0.59 percent. The foreclosure starts rate for sub-prime ARMs decreased 42 basis points to 5.23 percent, while the rate for sub-prime fixed rate loans decreased 50 basis points to 2.33 percent.
The percentage of prime ARMs in foreclosure decreased 59 basis points to 7.19 percent and decreased six basis points to 1.56 percent for prime fixed rate loans. The rate for sub-prime ARMs decreased 48 basis points to 17.26 percent, while the rate for sub-prime fixed rate loans decreased 44 basis points to 7.05 percent. The percentage of FHA loans in foreclosure increased 18 basis points to 1.35 percent. The percentage of VA loans in foreclosure increased five basis points to 1.45 percent.
Among the 50 states and the District of Columbia, California ranked 32nd in delinquencies and ninth 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.