Delinquency rates for mortgages on 1-4 unit residential properties decreased to a seasonally adjusted rate of 4.77% at the end of Q4 2014, according to the Mortgage Bankers Association’s national delinquency survey.
“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.
Improving employment conditions are credited with having a positive impact on the health of mortgage portfolios across the country.
“Mortgage performance is closely connected to job market health and most states saw employment growth continue over the past year. However, there were increases in the foreclosure starts rate in a handful of states that have economies closely tied to the oil industry,” Walsh said. “Out 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 saw increases in new foreclosures while the national average continued to trend lower.”
The percentage of loans on which the foreclosure process was started in Q4 dropped 10 basis points year-over-year to 0.36%
The serious delinquency rate was 3.44% -- a decrease of 108 basis points year-over-year.
“The overall delinquency rate fell to pre-recession levels and at 4.8 percent, was lower than the historical average of 5.4 percent for the time period 1979 to 2015,” Walsh said. “The rate at which new foreclosures were started decreased to 0.36 percent, the lowest rate since 2003 and only one-fourth of the record high level during the worst of the foreclosure crisis in the third quarter of 2009.”
Hard evidence shows just how much the market has improved since the housing market collapse.