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More Americans Are Missing Mortgage Payments

The housing market has been in recovery mode for some time now, but unfortunately, the number of consumers who fell behind on their home loan payments increased in the first quarter of this year. At the same time, foreclosure rates continued to fall to levels not seen since the start of the recession.

On a seasonally adjusted basis, the rate of all mortgage delinquency ticked up in the first quarter of the year, largely as a result of more borrowers falling behind on payments for the first time, according to the latest National Delinquency Survey from the Mortgage Bankers Association. In all, 7.25 percent of mortgages on residential properties with between one and four units were in some stage of delinquency during this time, up from 7.09 percent observed at the end of last year, but down from 7.4 percent annually.

“On a seasonally adjusted basis, the overall delinquency rate increased this quarter, driven by a slight increase in the 30-day delinquency rate,” said Michael Fratantoni, the MBA’s vice president of research and economics. “Normal seasonal patterns are beginning to re-emerge, but as has been true post-crisis, it is still difficult to parse typical seasonal swings from true changes in performance. … On a seasonally adjusted basis the largest increases in delinquency were in the subprime fixed and ARM categories, typically sensitive to income and payment shocks, and likely even more so in the current economic environment.”

At the same time, though, the number of loans that were 90 days or more behind on payments fell considerably, the report said. The rate dropped to 6.39 percent in the first quarter of the year from both the 6.78 percent seen at the end of 2012, and the 7.44 percent from a year earlier.

Homes entering the foreclosure process during the quarter slipped to 0.7 percent of outstanding mortgages, the lowest level seen since the second quarter of 2007, and a decline from 0.96 percent a year prior. The total number of homes in some stage of foreclosure accounted for 3.55 percent, which was the lowest level seen since 2008.

Increases in early delinquency rates typically lead to more foreclosures down the road, but in general, the housing market has continued to improve unabated for more than a year now, and experts believe that trend will continue at least through the end of 2013, if not longer.

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