Fewer home loans were past-due during the fourth quarter, and the improvement hit most states. It was the second consecutive decline in the rate of late payments. Performance improved more on prime mortgages than on subprime loans. There was nearly a thousand-basis-point spread between the delinquency rate in the best and worst states.
The rate of 30-day delinquency, including loans in foreclosure, was 10.83 percent in the fourth quarter of last year.
Delinquency was down from 11.47 percent in the third quarter, when the rate had improved 38 basis points from the second quarter. The rate was also better than 11.96 percent in the final three-month period of 2011.
The performance data was spelled out in the Mortgage Bankers Association’s National Delinquency Survey Q4 2012. The Washington, D.C.-based trade group released the report at its National Servicing Conference and Expo being held this week in Dallas.
On just prime mortgages, the rate fell to 6.97 percent from the third quarter’s 7.63 percent. Subprime delinquency declined to 32.23 percent from 33.00 percent.
Delinquency on loans insured by the Federal Housing Administration dropped to 15.02 percent from 15.22 percent, while the rate on mortgages guaranteed by the Department of Veterans Affairs improved to 8.05 percent from 8.55 percent.
Included in the latest overall number was a seasonally adjusted 30-day rate, excluding foreclosures, of 7.09 percent, tumbling from 7.40 percent three months earlier and 7.58 percent a year earlier.
MBA Chief Economist Jay Brinkmann noted that loan performance improved in almost every state, though Superstorm Sandy impacted delinquency and foreclosure rates in affected states.
Mississippi’s 12.59 percent delinquency rate was the worst in the nation. Georgia followed with a 10.05 percent rate, then Alabama’s 9.74 percent, Louisiana’s 9.54 percent and Tennessee’s 9.32 percent.
At 2.87 percent, North Dakota had a lower 30-day rate than any other state.
The U.S. foreclosure inventory rate, which was not seasonally adjusted, was 3.74 percent, dropping from 4.07 percent in the third quarter. The fourth-quarter 2011 foreclosure rate was 4.38 percent.
Florida’s foreclosure rate was the country’s worst: 12.15 percent. While the Sunshine State accounted for less than 8 percent of all loans serviced in the country, it accounted for nearly a quarter of all loans in foreclosure.
“The two biggest factors impacting the number of loans in the foreclosure process still are the magnitude of the problem in Florida and the judicial foreclosure systems in some states,” Brinkmann explained in the report. “Twelve percent of the mortgages in Florida are in the process of foreclosure, down from a peak of 14.5 percent last year but still an extraordinarily high rate that is impacting the national rate.
“In addition, while the percentages of loans in foreclosure dropped in almost all states, the average rate for judicial states was 6.2 percent, triple the average rate of 2.1 percent for nonjudicial states.”
The next-worst state was New Jersey, where the foreclosure inventory rate was 8.85 percent. After that was 6.34 percent in New York, 6.33 percent in Illinois and 5.87 percent in Nevada.
At 0.64 percent, Wyoming’s foreclosure rate was the most favorable in the nation.
The U.S. rate of foreclosures initiated during the fourth-quarter 2012 was 0.70 percent, better than the prior period’s 0.90 percent and the year-earlier period’s 0.99 percent.
Brinkmann said that the decline in rate of foreclosure starts was the largest ever based on MBA data. The fourth quarter rate stood at half the level of the peak reached in 2009.
