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National foreclosure picture at near 10-year low

Mortgage foreclosures are growing increasingly few and far between at the national level, and based on a newly released study, they're at a near decade-long low, according to recent numbers released by the Mortgage Bankers Association.

For home loans on one-to-four-unit residential properties, the delinquency rate in the last quarter of 2015 fell to a seasonally adjusted annual rate of 4.7 percent, MBA reported from its National Delinquency Survey. That's the measure's lowest ebb since the third quarter of 2006. When comparing October through December with the immediately previous three-month period, the delinquency rate decreased 22 basis points and by 91 basis points on a year-over-year basis.

Not only have completed foreclosures diminished, but so have starts. The rate of loans on which foreclosure procedures were just underway in 2015's final quarter was 0.36 percent of all outstanding loans, according to MBA, down from 0.38 percent in last year's penultimate three-month stretch and 0.46 percent one year ago.

Seriously delinquent loans diminish
Even seriously delinquent loans are shells of their former state. The percentage of loans 90 or more days past due in the fourth quarter was 3.4 percent, according to MBA's National Delinquency Survey. That's down 13 basis points from the third quarter and nearly 109 basis points lower than the corresponding October through December in 2014.

Marina Walsh, MBA's vice president of industry analysis, noted that the nation's foreclosure inventory hasn't been this low in almost eight years, and the economy is a big reason why.

"As the job market has improved and national home prices have rebounded, fewer borrowers were becoming seriously delinquent," Walsh explained, citing last year's fourth quarter as the best example. "[Meanwhile], borrowers previously behind on their payments were in a better position to pursue alternative options to resolve delinquent loans."

She added that mortgage performance is often highly correlated with how the job situation is performing at any given time in the United States. Generally speaking, those states that saw an uptick in job creation in the fourth quarter also had lower mortgage delinquency rates.

Drop in oil prices affecting foreclosure activity
At the same time, though, there were several states that bucked this encouraging trend, chiefly in oil-producing regions like Oklahoma, Louisiana, North Dakota and Colorado.

"Texas [also] saw increases in new foreclosures while the national average continued to trend lower," Walsh said.

Though it's still early, foreclosures have continued to wane in the new year. As noted by real estate agency RealtyTrac, there were approximately 95,200 foreclosure filings nationwide in January. That's down 8 percent from December and by 11 percent on a year-over-year basis. Foreclosure starts also trailed off during the 31-day period, down 1 percent from the previous month and by 18 percent versus January 2015. Only 12 states showed more foreclosure activity on an annual basis, including Oklahoma, Massachusetts, New Jersey, Pennsylvania and Indiana. The pickup in activity was particularly high in the Sooner State, up 290 percent.

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