Mortgage loan delinquencies fall 8 percent nationwide: MBA

The delinquency rate for mortgage loans on one- to four-unit residential properties fell nationwide to 7.99 percent in the third quarter of 2011, according to data from the Mortgage Bankers Association, the lowest level recorded since the fourth quarter of 2008. But homeowners may not be out of the woods yet, said Michael Fratantoni, MBA’s vice president of research and economics, who suggested that the result may be skewed by foreclosure starts.

The third quarter’s seasonally adjusted rate of 7.99 percent is a decrease of 45 basis points from the second quarter of 2011, the data shows, and a decrease of 114 basis points from a year ago at the same time.

“While the delinquency picture changed for the better in the third quarter, the issues continue to vary by geography,” Fratantoni said. “A closer look shows that there are different trends driving these results. The increase in the foreclosure starts rate this quarter was driven by large increases from just a few servicers, concentrated in certain ‘hardest hit’ states. For most servicers, the foreclosure starts rate was little changed over the quarter.”

Foreclosure starts increased this in the third quarter, Fratantoni noted, the first increase in a year after declining for three straight quarters.

“This is largely driven by loans leaving the loss mitigation process and the ending of state remediation programs and foreclosure moratoria,” he said.

The percentage of loans on which foreclosure actions were started during the third quarter was 1.08 percent, up 12 basis points from last quarter and down 26 basis points from a year ago. — Katherine Clarke