The number of borrowers falling behind on their mortgage payments dropped at the end of last year, an early sign the foreclosure crisis could be ebbing.
The Mortgage Bankers Association said Friday that the percentage of borrowers who missed just one payment on their home loans fell to 3.6 percent in the October to December quarter, down from 3.8 percent in the third quarter. The decline was especially remarkable because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.
The Carolinas also saw declines although the level of 30-day delinquencies among the states’ homeowners remain higher than the national average.
The decline in late payments is significant because it means the number of people going into foreclosure could slow this year. And that is important for all homeowners in areas where cheaply priced foreclosures are bringing down neighboring values.
Jay Brinkmann, the trade group’s chief economist, said the report likely marks “the beginning of the end” of the wave of mortgage delinquencies and foreclosures that started more than three years ago.
Still, more than 15 percent of U.S. homeowners with a mortgage have missed at least one payment or are in foreclosure, a record for the 10th straight quarter. The Carolinas also saw increases in total delinquencies.
“The bad news is that we still have a big problem,” Brinkmann said. “The good news is it looks like it may not get much bigger.”
There will be, however, more short-term pain. The number of borrowers who were at least three months behind continues to soar. Nationally, more than 5 percent of borrowers fell into that category in the fourth quarter, up from 4.4 percent in the third quarter.
Many of those borrowers are still being evaluated for help under the Obama administration’s $75 billion mortgage relief effort.
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