The national residential delinquency rate fell by 10% in the fourth quarter, to 8.22%, the lowest reading in two years, according to data released Thursday morning by the Mortgage Bankers Association.
And though late payments showed a strong improvement on a sequential basis, residential foreclosures started during the quarter fell slightly, to 1.27% of outstanding mortgages, compared to 1.34% in the third quarter.
Mortgage bankers of all different charters service $9.8 trillion of one- to four-family loans, which means $806 billion of all outstanding mortgages were 30 days or more past due in the fourth quarter, according to calculations made by National Mortgage News. (The MBA lists late payments separately from foreclosures.)
For now, it appears that delinquencies peaked at 10.06% in the first quarter of 2010, with foreclosures hitting a high of 1.34% in the third quarter. However, mortgage executives and real estate professionals remain cautious about calling a housing recovery, citing stubbornly high unemployment and ultra-tight underwriting.
Delinquencies in the subprime market continue to be at least four-times higher than those among prime loans in almost all late-payment categories. But subprime lending, too, showed improvement during the quarter. The MBA said the subprime delinquency rate fell to 23.01% in the fourth quarter, from 26.23% in the quarter before.
The FHA delinquency rate fell to 12.26%, from 12.62% in the fourth quarter.
