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Mortgage Delinquency at Decade Low

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As the delinquency rate on mortgages retreated to a level not seen in a decade, the foreclosure rate declined to a new nine-year low.

Residential loan delinquency of at least 30 days, including the foreclosure rate, finished the third quarter of this year at
6.07 percent.

The non-current rate
improved from 6.30 percent as of three months earlier and from a year earlier, when the rate was 6.87 percent.

The Mortgage Bankers Association reported the performance metrics in its National Delinquency Survey Q3 2016.

The most-recent delinquency rate reflected a seasonally adjusted 4.52 percent 30-day rate excluding foreclosures — the lowest rate since it was 4.39 percent in the second-quarter 2006. Thirty-day delinquency was 4.66 percent as of mid-2016 and 4.99 percent as of Sept. 30, 2015.

“Mortgage delinquency and foreclosure rates continued to decrease in the third quarter as sustained job growth and low unemployment helped more borrowers stay current with their mortgage payments,” MBA Vice President of Industry Analysis Marina Walsh said in an accompanying announcement. “Monthly job growth averaged 206,000 jobs in the third quarter, making it the strongest quarter in 2016 thus far. The unemployment rate stayed just below 5 percent and wage growth continued to strengthen. These factors helped the mortgage delinquency rate improve.”

Prime mortgage 30-day delinquency was 2.62 percent as of Sept 30, 2016, while on subprime mortgages, the rate was 14.53 percent. Delinquency on mortgages insured by the Federal Housing Administration was 8.30 percent, and it was 3.89 percent on loans guaranteed by the Department of Veterans Affairs.

Thirty-day delinquency as of the third-quarter 2016 in Mississippi stood at 8.68 percent — the highest rate of any state. Louisiana’s 8.19 percent was next, then Alabama’s 6.41 percent, West Virginia’s 6.19 percent and Indiana’s 5.97 percent.

North Dakota’s 2.44 percent was the lowest of any state.

Also factored into the U.S. non-current rate was a 1.55 percent foreclosure inventory rate — the lowest rate since the  second-quarter 2007’s 1.40 percent. The foreclosure rate was 1.64 percent at the end of the second quarter and 1.88 percent at the close of the third-quarter 2015.

The foreclosure rate on prime mortgages
was 0.89 percent. The rate was 6.99 percent on subprime mortgages, 2.11 percent on FHA loans and 1.10 percent on VA mortgages.

At 5.79 percent, the foreclosure rate was highest in New Jersey. A distant second was New York’s 4.32 percent, then 2.97 percent in Maine, 2.82 percent in Hawaii and 2.69 percent in the District of Columbia.

Colorado’s 0.42 percent was the lowest foreclosure rate in the nation.

The rate of mortgages past-due at least 90 days or in the process of foreclosure was 2.96 percent — the lowest since the third-quarter 2007 when the rate was 2.95 percent.

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