Real estate foreclosures down nationwide

By: Inman News
Late house payments and mortgage foreclosures in the first quarter of 2005 dropped compared to the same time period last year, helped by an improving economy, a mortgage survey revealed.

At the end of the first quarter, the mortgage delinquency rate was 4.31 percent, down from 4.46 percent in the same quarter of 2004 and down from 4.38 percent at the end of the fourth quarter of last year, the Mortgage Bankers Association said.

"Mortgage delinquency" means late payments. The MBA's figures are seasonally adjusted and apply to one-to-four unit residential properties.

The foreclosure rate on mortgages entering the foreclosure process was 0.42 percent at the end of the first quarter, down from 0.47 percent in the year-ago quarter and 0.46 percent at the end of the fourth quarter.

During the first quarter of 2005, the U.S. economy grew at almost 3.5 percent in annualized real terms, adding 180,000 jobs a month, Douglas Duncan, the MBA's chief economist and senior vice president, said in a statement.

That, combined with the low interest rate environment, helped consumers strengthen their household finances, increasing the percentage of homeowners making their mortgage payments on time to nearly 96 percent, he said.

"Economic growth is expected to remain strong over the next couple of years. Likewise, job growth should be steady in the presence of modest interest-rate rises," Duncan said. "These expectations likely mean we will continue to see moderate declines in delinquencies for the next few quarters."

The inventory of loans in the foreclosure process edged down to 1.08 percent at the end of the first quarter, from 1.29 percent in the year-ago period and 1.15 percent in the previous quarter.

In the MBA's report on the fourth quarter of 2004 released in March, the seasonally adjusted rate of loans entering foreclosure was up 5 basis points from the preceding quarter, to .44 percent, suggesting that concerns about rising foreclosures in coming months might be valid. But this phenomenon did not continue, with the latest report, released today, with the seasonally adjusted rate of loans entering the foreclosure process down 4 basis points from the fourth quarter of 2004 and down 5 basis points from the previous year.

The MBA has conducted the National Delinquency Survey on a quarterly basis since 1953. The survey covers more than 38 million loans, representing more than 80 percent of all first-lien residential mortgage loans in the United States.