Mortgage foreclosures and delinquencies in the U.S. continued to drop in the fourth quarter of 2015, another sign of the improving housing market nationwide, according to a recent survey by the Mortgage Bankers Association.
The percentage of loans on which foreclosure actions were started during the fourth quarter was .36%, a decrease of two basis points from the previous quarter, and down 10 basis points from the same time the year before, according to the MBA’s National Delinquency Survey released in February. This foreclosure starts rate was at the lowest level since the second quarter of 2003.
The percentage of loans in the foreclosure process at the end of the third quarter was 1.77%, according to the survey, which was the lowest foreclosure inventory rate seen since the third quarter of 2007.
Meanwhile, the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.77% of all loans outstanding at the end of the fourth quarter of 2015, which was the lowest level since the third quarter of 2006, according to the survey. The delinquency rate decreased 22 basis points from the previous quarter, and 91 basis points from the year before, according to the 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 serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 3.44%, which was the lowest serious delinquency rate since the third quarter of 2007.
“As the job market has improved and national home prices have rebounded, fewer borrowers were becoming seriously delinquent, while borrowers previously behind on their payments were in a better position to pursue alternative options to resolve delinquent loans,” Marina Walsh, MBA’s vice president of industry analysis, said in a news release about the survey results. “The overall delinquency rate fell to pre-recession levels and at 4.8% was lower than the historical average of 5.4% for the time period 1979 to 2015.”
While most states saw a drop in foreclosures starts and employment growth in 2015, there were increases in the foreclosure starts rate in a few states that have economies closely tied to the oil industry. Of 12 states that had an increase in foreclosure starts in the fourth quarter, five of those were in states with oil-dependent local economies — Oklahoma, North Dakota, Louisiana, Colorado and Texas, according to Walsh.
At the same time, foreclosure inventory rates continued to decline in most states. New Jersey and New York, which lead the nation in foreclosure inventory rates, had the largest year-over-year declines in their respective histories, the survey found.
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