Fewer homeowners were behind on their mortgage payments in the fourth quarter of 2011, according to the Mortgage Bankers Association, pushing delinquencies to a three-year low.
“The total delinquency rate and foreclosure starts rate decreased and are back down to levels from three years ago,” said Jay Brinkmann, MBA’s chief economist and senior vice president for research and education, in a news release.
“A major reason is that the loans that are seriously delinquent are predominantly made up of loans originated prior to 2008 and this pool is steadily growing smaller as a percent of total loans outstanding,” he said.
“In addition, employment is the key driver of mortgage performance and the mortgage delinquency rate is actually falling faster than the unemployment rate is declining,” he said.
The delinquency rate for borrowers behind on their mortgage payments by 30 days or more dropped to 7.6 percent in the fourth quarter, down from 8.3 percent the previous year and down from the market cycle peak of 10 percent in the beginning of 2010. Still, it represents a higher rate than the historical average of 5 percent.
And foreclosures remain high and of concern to the overall housing recovery. At the end of 2011 about 4.4 percent of all home loans were in foreclosure, down only a little from the year before, when it peaked at 4.6 percent. The historical average is around 1.5 percent.
The states with the highest percentage of foreclosures were Florida, New Jersey, and Illinois.
“The improvements shown in this survey are broad-based geographically, with more than half of the 50 states and DC showing no change or a decline in foreclosure starts and 90-plus day delinquencies. California, Florida and Arizona also showed marked improvement in most measures, but Nevada showed a large uptick in 90-plus day delinquencies, possibly a sign that new foreclosures are being delayed for various reasons. The concentration of loans in foreclosure is still very much focused in a handful of states.”