According to the latest National Delinquency Survey from the Mortgage Bankers Association (MBA), delinquent residential mortgages are at their lowest rate since the second quarter of 2007. This marks a decline in the rate by 24 basis points (BPs) since the first quarter of 2015 and by 74 BPs compared to the second quarter of 2014.
The National Delinquency Survey measures mortgages on one-to-four-unit residential properties that are at least 30 days past due while omitting mortgages that are already in the foreclosure process. However, foreclosures are also down by 13 BPs over last quarter and 40 BPs over last year.
In addition, serious delinquencies, defined as those a minimum of 90 days overdue, fell by 29 BPs over last quarter and by 85 BPs in the last 12 months. Seventy-three percent of mortgages in serious delinquency are legacy loans that were originated before 2008.
The rate of all delinquent home loans is at its lowest level since the second quarter of 2007 while the rate of serious delinquencies and foreclosures have not been this low since the fourth quarter of 2007.
The decline in foreclosures does not seem to be localized to any particular state as nearly all have reported lower rates this quarter than in the previous quarter, which is a strong sign of national recovery in the housing market and the job market.
Marina Walsh, vice president of industry analysis at MBA, pointed out that only 40 percent of mortgages originate in judicial foreclosure states, but these states account for a majority of foreclosures.
