On Thursday, February 16, 2012, the Mortgage Bankers Association detailed that in the fourth
quarter of 2011, the mortgage percentages at least one payment preceding due decreased and less
loans penetrated foreclosure process, marking progress perceived in the economy.
According to Jay Brinkmann, chief economist and senior vice president for research and education
of Mortgage Bankers Association: “The total delinquency rate and foreclosure starts rate decreased
and are back down to levels from three years ago,” as he stated in a news release. “A major reason
is that the loans that are seriously delinquent are predominantly made up of loans originated prior to
2008 and this pool is steadily growing smaller as a percent of total loans outstanding,” he added.
“In addition, employment is the key driver of mortgage performance and the mortgage delinquency
rate is actually falling faster than the unemployment rate is declining,” he said.
As reported by the MBA’s quarterly delinquency survey, the mortgage percentages that have at least
one payment proceeding due or are in foreclosure was 12.63% in the fourth quarter from the third
quarter’s 12.73% and 2010’s fourth quarter of 13.7%.
The MBA also said that a 7.58% of all mortgages outstanding, seasonally adjusted, were faulty
in the fourth quarter, down from 7.99% in the third quarter and down from 8.25% in 2010’s fourth
quarter.
The 0.99% of mortgage loans marked the start of foreclosure actions, down from the third
quarter‘s1.08% and a year ago ‘s1.27%. Concurrently, at the end of the fourth quarter, 4.38%
of mortgages were in the foreclosure process down from the third quarter‘s 4.43% and a year
ago ‘s1.4.64%.
42.9 million loans on one- to four- unit residential assets or nearly 88% of all first-lien residential
mortgages in the country were covered by the MBA survey.
RealtyTrac made public a separate survey on Thursday that reflected a 3% rise in the January
foreclosure activity, compared to the previous month. Still, January’s activity was lower even on
a year-over-year basis. The data presented by RealtyTrac in its report regard default notices,
scheduled auctions and bank repossessions.
Brinkmann stated, “By several measures, mortgage delinquencies are about halfway back to long-
term, pre-recession levels. The total delinquency rate peaked at 10.1% in the first quarter of 2010.
It now stands at 7.6%, about halfway to the longer-term pre-recession average of roughly 5%”.
He added, “The rate of foreclosure starts peaked in the third quarter of 2009 at 1.4% but has now
dropped to 1%, about halfway to the longer-term average of slightly under 0.5%”.
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