Mortgage Banker's Association's National Delinquency Survey showed a seasonally adjusted rate decrease of 4.99 percent in overall outstanding loans for one-to-four-unit residential properties at the end of 2015's third quarter; the lowest since the first quarter of 2007. The delinquency rate plummeted 31 basis points from the previous quarter, and 86 basis points from a year ago, World Property Journal reports.
Included in the equation are loans at least one payment past due while disregarding pending foreclosure loans. At the end of the third quarter, pending foreclosure loans was at 1.88 percent which is 21 basis points down from the second quarter and 51 basis points from a year ago. This is considered as the lowest rate for foreclosure inventory since 2007's third quarter.
This is the lowest foreclosure starts rate since the second quarter of 2005 at 0.38 percent which is 2 basis points below that of the previous quarter and 108 points below that of last year's.
The percentage of serious delinquency rate or loans that are pending for foreclosure or past due for 90 days or more decreased at 3.57 percent or 38 basis points from the last quarter and 108 basis points from last year's. Since the third quarter of 2007, this by far is the lowest serious delinquency rate recorded.
MBA's Vice President of Industry Analysis, Marina Walsh, made the following commentaries on the survey results:
"Overall delinquency rates and the percentage of loans in foreclosure continued to fall in the third quarter and are at their lowest levels since the first quarter of 2007. The serious delinquency rate - measured by those loans that are 90 days or more delinquent or in the process of foreclosure - declined for nearly every state in the nation. The factors influencing this outcome include a nationwide housing market recovery, resolution of long-standing troubled loans that eventually proceeded through the foreclosure process, and an improving employment outlook that provided distressed borrowers viable alternatives to foreclosure."
"The overall delinquency rate for FHA loans dropped to 8.91 percent in the third quarter from 9.01 percent in the second quarter, as the 90 day or more delinquent category declined by 20 basis points and more than offset an 11 basis point increase in the 30 day delinquency rate. In addition, the FHA foreclosure inventory rate dropped to 2.65 percent in the third quarter, from 2.68 percent in the second quarter and 2.73 percent a year ago."
"While only 40 percent of loans serviced are in judicial states, these states account for a majority of loans in foreclosure. For states where the judicial process is more frequently used, 3.01 percent of loans serviced were in the foreclosure process, compared to 1.06 percent in non-judicial states. States that utilize both judicial and non-judicial foreclosure processes had a foreclosure inventory rate closer that of the non-judicial states at 1.26 percent."
