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The delinquency rate for mortgage loans on one- to four-unit residential properties decreased to a seasonally adjusted rate of 5.68 percent of all loans outstanding at the end of the fourth quarter of 2014. This was the lowest level since the third quarter of 2007. The delinquency rate decreased 17 basis points from the previous quarter, and 71 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
The delinquency rate includes 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 at the end of the fourth quarter was 2.27 percent, down 12 basis points from the third quarter and 59 basis points lower than the same quarter one year ago. This was the lowest foreclosure inventory rate seen since the fourth quarter of 2007.
The percentage of loans on which foreclosure actions were started during the fourth quarter was 0.46 percent, an increase of two basis points from the previous quarter, but was eight basis points below the level of the fourth quarter of 2013.
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 4.52 percent, a decrease of 13 basis points from last quarter, and a decrease of 89 basis points from the fourth quarter of 2013.
“Delinquency rates and the percentage of loans in foreclosure decreased for another quarter and were at their lowest levels since 2007,” said Marina Walsh, MBA’s vice president of industry analysis. “We are now back to pre-crisis levels for most measures. The foreclosure inventory rate has decreased every quarter since the second quarter of 2012, and is now at the lowest level since the fourth quarter of 2007. Foreclosure starts ticked up two basis points, after being flat last quarter, largely due to state-level fluctuations in the speed of the foreclosure process. Compared to the same quarter last year, foreclosure starts are down eight basis points."
On a seasonally adjusted basis, the overall delinquency rate decreased 17 basis points for all loan types to 5.68 percent. The seasonally adjusted delinquency rate decreased eight basis points to 2.97 percent for prime fixed loans and decreased six basis points to 4.77 percent for prime ARM loans. For sub-prime loans, the delinquency rate decreased 38 basis points to 17.60 percent for subprime fixed loans and decreased 24 basis points to 19.63 percent for sub-prime ARM loans. The FHA delinquency rate rose by four basis points to 9.73 percent and VA delinquency rate fell by 30 basis points to 4.98 percent.
The non-seasonally adjusted percentage of loans in foreclosure, also known as the foreclosure inventory rate, decreased from last quarter to 2.27 percent. The foreclosure inventory rate for prime fixed loans decreased eight basis points to 1.18 percent and the rate for prime ARM loans decreased 25 basis points from last quarter to 2.74 percent. For sub-prime loans, the rate for sub-prime fixed loans decreased by one basis point to 7.89 percent and the rate for sub-prime ARM loans decreased 47 basis points to 14.15 percent. The foreclosure inventory rate for FHA loans decreased 21 basis points to 2.52 percent while the rate for VA loans decreased by nine basis points to 1.39 percent.
The non-seasonally adjusted foreclosure starts rate increased four basis points for prime fixed loans to 0.24 percent and remained unchanged for prime ARM loans at 0.44 percent. For sub-prime fixed loans, the foreclosure starts rate increased 15 basis points to 1.60 percent and decreased 24 basis points for sub-prime ARM loans to 1.94 percent. For FHA loans, the unadjusted foreclosure starts rates decreased by six basis points to 0.61 percent while the foreclosure starts rate increased by four basis points for VA loans to 0.36 percent.