Delinquencies on home loans dropped in March to 0.84 percent of the nation’s 50.2 million mortgages — the first month since 2007 that delinquencies were below the 1 percent mark, Lender Processing Services Inc. reports.
First-time defaults — loans that are at least 60 days delinquent — peaked in January 2009 at 2.89 percent.
As the economy and employment gradually are on the mend and home prices rise, more home owners are keeping up with their mortgage payments.
“Mortgage quality is improving rapidly,” says Mark Zandi, chief economist for Moody’s Analytics Inc. “Once we’re able to work through this last bulge of foreclosed property, which I think we’ll be able to do over the next 18 to 24 months, mortgage credit quality is going to look absolutely beautiful.”
Home loans at least 30 days delinquent or in foreclosure dropped to 5 million in March. In January 2010, delinquent loans for at least 30 days peaked at 7.7 million, LPS reports.
Mortgage default rates are highest among underwater borrowers, those who owe more on their home than it is currently valued. Four percent of borrowers have defaulted on their loans that owe at least 50 percent or more on their home, compared with 0.6 percent of home owners with equity, according to LPS.
More home owners are seeing equity once again in their homes, as prices rise. The number of mortgages with negative equity dropped to 18 percent of homes with a mortgage in January, down from 41 percent one year earlier.
Source: “Housing Crash Fades as Defaults Decline to 2007 Levels,” Bloomberg