Mortgage delinquencies level off
The percentage of homeowners who are behind on their mortgage payments inched higher in the first quarter while the number of new foreclosures declined, a lobbying group for the home-lending industry says.
"Overall, it's a picture of the market on the mend," Michael Fratantoni, an economist at the Mortgage Bankers Assn., said in an interview.
In a report Thursday, the trade group said 8.32% of homeowners with mortgages had missed at least one payment, up from 8.25% in the final quarter of 2010 -- a change Fratantoni described as more "leveling off" than significant statistical change.
The rate, adjusted for seasonal variances, was well below that recorded a year earlier: 10.06% of borrowers were in some stage of delinquency in the first quarter of 2011.
In a positive sign, the percentage of loans that are more than 90 days delinquent was down compared to the previous quarter and a year earlier, Fratantoni said.
The delinquency rate does not include homes in the foreclosure process. The trade group said 4.52% of all residential mortgages were in foreclosure during the quarter on a nonseasonally adjusted basis, down from 4.64% during the fourth quarter of 2010 and 4.63% during the first quarter of 2010.
The percentage of homes entering foreclosure dropped from 1.27% in the fourth quarter to 1.08% in the first quarter.
Increased scrutiny of foreclosures, triggered by revelations that banks cut legal corners as they took back homes, has dragged the repossession process out to unprecedented lengths, industry data firm RealtyTrac said in a recent report that looked at data from April, the beginning of the second quarter.
Big banks specializing in customer service on mortgages have agreed to implement new rules imposed by federal regulators in the aftermath of that scandal, including providing a single person to contact for each troubled borrower, while a task force of state attorneys general works to impose more sweeping reforms.
Foreclosure filings, which include initial notices of default, scheduled auctions and bank seizures of property, dropped 9% in April from March and plunged 34% from April 2010 as 219,258 U.S. properties received new filings in April, a study by Irvine-based RealtyTrac showed last week.
California, where the housing picture was once far more grim than the nation's, more closely mirrored the rest of America in the latest report from the Mortgage Bankers Assn.
Delinquent loans made up 8.31% of all residential mortgages in California during the first quarter, down from 10.88% a year earlier. The rate of loans 90 or more days delinquent was 4.84%, down from 6.98%. Loans in foreclosure had dropped from 5.15% to 3.97%, Fratantoni said.
-- E. Scott Reckard
Photo: A Richmond, Calif., foreclosure sale last month. Credit: Justin Sullivan / Getty Images