Consumers are steadily getting better at paying their mortgage with fewer and fewer loans moving into foreclosure, according to the Mortgage Bankers Association’s latest National Delinquency Survey.
The report found that the delinquency rate for mortgage loans on one- to four-unit residential properties decreased to a seasonally adjusted rate of 4.71% of all loans outstanding at the end of the first quarter of 2017. The delinquency rate was down nine basis points from the previous quarter, and was six basis points lower than one year ago.
Marina Walsh, MBA’s vice president of industry analysis, explained, “Mortgage delinquencies decreased overall in the first quarter of 2017, driven by a drop in both the FHA and VA delinquency rates from the previous quarter as the conventional delinquency rate held constant.”
On top of this, Walsh added that employment growth started 2017 on strong footing, with the economy adding 216,000 jobs in January 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,” she stated.
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, fell to 2.76%, a decrease of 37 basis points from last quarter, and a decrease of 53 basis points from last year.
Walsh concluded, “In addition, nearly all states had a decrease in the percentage of loans in foreclosure in the first quarter. The overall percentage of loans in the process of foreclosure was 1.39%, its lowest level since the first quarter of 2007. While judicial states still had more than three times the percent of loans in foreclosure as non-judicial states, that measure declined to the lowest level since the fourth quarter of 2007.”