The share of all loans that were at least one payment past due or in foreclosure fell to 10.3% in the first quarter, the lowest level in four years, the Mortgage Bankers Association said Thursday.
But the mortgage delinquency rate, which excludes loans in the process of foreclosure, rose slightly in the first quarter to 7.25%, a 15-basis-point rise from a year earlier. The MBA attributed the rise in first-quarter delinquencies to normal seasonal patterns and economic weakness.
"We remain in a period of slow and uneven economic and job growth in the U.S. and there are still many borrowers without stable, full-time employment, or that are still unemployed," said Michael Fratantoni, the MBA's vice president of research and economics.
Meanwhile, the percentage of loans in the process of foreclosure fell to 3.55%, the lowest level since 2008.
The inventory of homes in foreclosure fell in 40 states, led by declines in Florida, California and Nevada. Florida still tops the list with 23.2% of loans in foreclosure, followed by New York with 8.1%, New Jersey with 7.4%, Illinois with 6.5% and California with 6.4%.
But 33 states saw an increase in new foreclosure starts, an indication of the uneven nature of the economic recovery. Because some large mortgage servicers do not participate in the MBA's survey, the improvement in the foreclosure situation "may be slightly larger than stated," the MBA said in a press release.
The total delinquent rate for loans insured by the Federal Housing Administration fell to 9.94% in the first quarter, down 109 basis points from a year earlier.