According to the Mortgage Bankers Association (MBA), about 11% of homeowners who obtained loans for mortgages were overdue on payments beyond thirty days or foreclosing by December 2013. The percentile points to approximately five million homes. A year ago, that figure was 12% and 14.7 % in the first half of 2010.
Seriously delinquent mortgages overdue for more than a quarter or foreclosing dropped to a whopping 6.8 percent in the third quarter of 2012. In the previous quarter that figure tagged at 7%. Year-ago figures pointed to 7.73%.
This is a clear indication of improvements in the housing sector, since mortgage borrowers were able to prevent foreclosures on their homes. It is also a sign of a recovery in the economy, reports Bloomberg News. The VP of the MBA, Michael Fratantoni was quoted as saying by Bloomberg that it is a positive trend. A standard rate for foreclosure starts, before the recession reached its high-point in 2009, was approximately 0.5%.
Meanwhile, the average sale price for homes spiked 12%, the highest addition since November 2005, reported the National Association of Realtors (NAR). Home sales have gone up a nominal 0.4% since January 2013.
Zillow Inc., a property sales group said, these figures suggest that about 2 million American homeowners got back to a positive start. An additional million are expected to return to normal equity status with prices anticipated to climb higher. Despite elevated home prices and an upbeat outlook for the housing industry by the end of 2012, 14 million homeowners had a combined mortgage default equal to $1 trillion more than the value of their homes.
In non-judicial states such as Arizona where foreclosures are filed through an administrative process, foreclosures were down since 2011. However, judicial states such as Florida where banks process foreclosures through a judge had the highest rate of foreclosures.
Most homes linked to bad credit loans and borrowers with poor credit history were either foreclosed or sold, reducing the number of new mortgage delinquencies. In addition, efforts to modify loans and refinancing were contributing factors in decreasing the defaults.