WASHINGTON (8/14/15)--Delinquent mortgages and foreclosures both continued to decline in the second quarter of this year, according to the Mortgage Bankers Association (MBA).
The MBA reported that the national aggregate mortgage delinquency rate fell 24 basis points to 5.3% during the quarter, pushing the reading down to its lowest point since 2Q 2007 (Economy.com Aug. 13).
Further, the percentage of loans in foreclosure fell 13 basis points to 2.09%, also the lowest mark since 2007. Following in the second quarter, also the lowest mark since 2007. Following the bursting of the housing bubble in mid-2007, the United States entered a severe recession.
Foreclosure starts dropped by 5 basis points to 0.4% when excluding subprime loans, which saw a 6 basis-point jump. In the prime segment, starts fell by 7 basis points to 0.23%, while Federal Housing Administration loan foreclosures declined 13 basis points to 0.57%, and Veterans Affairs loans slipped by 5 basis points to 0.32%.
“Mortgage credit quality continued to strengthen in the second quarter, with foreclosure rates falling across all stages and loan types,” said Jesse Rogers, Moody’s analyst (Economy.com). “Most measures of credit conditions are now at or near prerecession levels.”
The delinquency rate for mortgages 90 days past due dropped to 1.92% from 2.04% during the quarter, while mortgages 30 days overdue fell 7 basis points to 2.49%.
The seriously delinquent rate, which tracks mortgages that are both 90 days past due and also in the foreclosure process, slipped to 3.95% from 4.24%, according to the MBA.
“With fewer distressed properties making their way into the market, foreclosures will be less of a drag on house prices in the coming quarters,” Rogers said. “Stronger house price appreciation will improve home equity and mortgage debt performance, especially as homeowners take advantage of low interest rates to refinance loans.”