Lower defaults among government-guaranteed mortgage borrowers drove the overall delinquency rate down, the Mortgage Bankers Association said.

There was a seasonally adjusted default rate of 4.71% for the first quarter, down nine basis points from the fourth quarter and six basis points from the first quarter of 2016.

This reverses two consecutive quarters where the default rate increased.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure.

There was a drop in the Federal Housing Administration-insured and Veterans Affairs-guaranteed mortgage delinquency rates from the previous quarter but the conventional delinquency rate held constant, said Marina Walsh, the MBA's vice president of industry analysis, in a press release.

An improving jobs market is an underlying factor to improved loan performance.

"Employment growth started 2017 on strong footing, with the economy adding 216,000 jobs in January 2017 and 232,000 jobs in February. Average hourly wage growth increased 2.8% over the year, and has maintained a generally increasing trend since late 2015. These fundamentals have helped to support the performance of all loan types — whether FHA, VA or conventional loans," said Walsh.

The FHA delinquency rate is 8.09%, compared with 9.02% in the fourth quarter, while VA delinquency rate fell to 3.9% from 4%. The conventional mortgage delinquency rate remained at 4.04%.

The first quarter's foreclosure rate was 1.39%, down 14 basis points from the fourth quarter and 35 basis points lower than one year ago.

Foreclosure starts rose by two basis points from the fourth quarter to 0.3%, but this is five basis points lower than one year ago.

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