Mortgage Loan Delinquencies Drop

The percentage of mortgage loans that were delinquent at the end of the fourth quarter 2009 fell to a seasonally adjusted rate of 9.47% from 9.64% the previous quarter, according to the Mortgage Bankers Association (MBA). The data seem to indicate that fewer homeowners are getting behind on mortgage loan payments.

Included in the figure are loans that are at least one payment past due, but not loans in the foreclosure process. There were 4.58% mortgage loans in the foreclosure process at the end of the fourth quarter. The survey recorded the highest combined percentage (15.02%) of mortgage loans that were in foreclosure and at least one payment behind.

The data give some hope that the housing market could be improving. Jay Brinkmanm, MBA's chief economist, said in a statement:

The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight. We normally see a large spike in short-term mortgage delinquencies at the end of the year due to heating bills, Christmas expenditures and other seasonal factors. Not only did we not see that spike but the 30-day delinquencies actually fell by 16 basis points from 3.79 percent to 3.63 percent ... If the normal seasonal patterns hold for the first quarter, we should see an even steeper drop in the end of March data.

Time will tell if more homeowners will avoid becoming delinquent on loans or ending up in foreclosure. Unemployment rates are still high and some people who have been without a job for a long time have given up on finding anything and dropped out of the work force. So until more people find steady full-time employment, the housing recovery is still on shaky ground.

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