The national residential delinquency rate fell by 10% in the fourth quarter to 8.22%, the lowest reading in two years, according to figures released Thursday morning by the Mortgage Bankers Association.
But although late payments showed a strong improvement on a sequential basis, residential foreclosures started during the quarter fell every so slightly to 1.27% of outstanding mortgages, compared to 1.34% in 3Q.
Mortgage bankers of all different charters service $9.8 trillion of one- to four-family loans, which means $806 billion of all outstanding mortgages are 30-days or more late, according to calculations made by National Mortgage News. (MBA lists late payments separately from foreclosures.)
For now, it appears that delinquencies peaked out at 10.06% in the first quarter of 2010 with foreclosures hitting a high of 1.34% in the third quarter of last year.
However, mortgage executives and real estate professionals are still cautious about any recovery in housing, citing stubbornly high unemployment, and ultra tight underwriting standards.
Delinquencies in the subprime market continue to be at least four-times higher than those of prime loans in almost all late payment categories. But there was in improvement in subprime during 4Q too. According to MBA, the subprime delinquency rate fell to 23.01% in the fourth quarter, compared to 26.23% in 3Q.
The FHA delinquency rate fell to 12.26% in the quarter from 12.62% in the prior period.
