Delinquencies on mortgage loans fell by nearly eight percent to reach 6.41 percent at the end of the third quarter—down from 6.96 percent in the second quarter, reaching the lowest rate seen since the second quarter of 2008.
The Mortgage Bankers Association’s National Delinquency Survey showed that delinquency rates, which include loans that are at least one payment past due but not yet in foreclosure, have fallen by approximately 13.4 percent year-over-year.
The percentage of loans in foreclosure at the end of the quarter decreased by approximately 7.5 percent from the second quarter and nearly 25 percent from one year ago—the lowest foreclosure inventory rate seen since 2008.
The percentage of loans with pending foreclosure actions during the third quarter decreased fell to reach 0.61 percent, a 4.7 percent decrease and the lowest level since early 2007.
Serious delinquencies, which include loans that are 90 days or more past due or in foreclosure, fell to 5.65 percent from 5.85 percent in the second quarter.
Loans at least one payment past due or in foreclosure reached the lowest number in five years, falling to 9.75 percent—a 3.8 percent decrease from the second quarter.
“Clearly local home price bubbles and the temporary injections from cash out refinancing and speculation temporarily boosted some areas and made the subsequent economic crash even worse, but we are now at a point where local economic growth and population movements will determine housing demand and mortgage performance,” MBA Chief Economist and Senior Vice President of Research and Education Jay Brinkmann said. “Those areas with the weaker climates for economic growth will see home value and delinquency problems that are beyond the abilities of the mortgage industry and housing regulators to impact in a meaningful way.”