Both the national residential delinquency rate and new foreclosures initiated dropped in the fourth quarter of 2009. Is it a sign that the industry may have finally turned the corner on the housing crisis? The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) says yes.[IMAGE]
""We are likely seeing the beginning of the end,"" according to Jay Brinkmann, MBA's chief economist. The end ""of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007, continued with the meltdown of the California and Florida housing markets Ã¢â‚¬Â¦ and culminated with a recession that saw 8.5 million people lose their jobs,"" Brinkmann told reporters Friday.
According to MBA's fourth quarter report, the national delinquency rate for mortgage loans on residential properties has fallen to 9.47 percent of all loans outstanding. That's down 17 basis points from 9.64 percent in the third quarter of 2009. The delinquency[COLUMN_BREAK]
rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure.
The percentage of loans in foreclosure at the end of the fourth quarter was 4.58 percent, MBA reported, an increase of 11 basis points from the third quarter of 2009. However, the number of loans on which new foreclosure actions were started was 1.20 percent, down 22 basis points from last quarter.
All told, calculations by MBA put the total number of mortgages in foreclosure or delinquent at around 4.3 million. While this number is still staggering, the trade group says there are positive indicators when you drill down into the data.
The percentage of loans 30 days past due fell by 16 basis points, from 3.79 percent in Q3 to 3.63 percent last quarter. Brinkmann called the sizable drop Ã¢â‚¬Å“a concrete sign that the end may be in sight.Ã¢â‚¬Â He explained that typically short-term delinquencies spike at the end of the year due to seasonal factors affecting homeownersÃ¢â‚¬â„¢ finances. Only three times before in the history of the MBA survey has the 30-day delinquency rate dropped between the third and fourth quarter and never by this magnitude, he said.
""This drop is important because 30-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures,Ã¢â‚¬Â Brinkmann said. Ã¢â‚¬Å“With fewer new loans going bad, the pool of seriously delinquent loans and foreclosures will eventually begin to shrink. It also gives us growing confidence that the size of the problem now is about as bad as it will get.Ã¢â‚¬Â