Although seasonal adjustments increased the 1^stquarter 2012 delinquency rate, non-seasonally adjusted mortgage delinquencies continue to decrease in severalcategories, according to the Mortgage Bankers Association's National Delinquency Survey released Thursday.

The delinquency rate for mortgage loans on one-to-four-unitresidential properties increased to a seasonally adjusted rate of7.25% of all loans outstanding at the end of the 1st quarter of2013, a 16 basis points increase from 4th quarter 2012, the MBAsaid.
However, the non-seasonally adjusted rate decreased 76 basis pointsfrom 4^th quarter 2012 to 6.75%. The MBA said a decreasein the 1^st quarter is typical.

“On a seasonally adjusted basis, the overall delinquency rateincreased this quarter, driven by a slight increase in the 30-daydelinquency rate,” said Michael Fratantoni, MBA's vice president ofresearch and economics.

“Normal seasonal patterns are beginning to re-emerge, but as hasbeen true post-crisis, it is still difficult to parse typicalseasonal swings from true changes in performance,” Fratantonisaid.

“It is also important to note the decline relative to last yearat this time. Regardless, we remain in a period of slow anduneven economic and job growth in the U.S. and there are still manyborrowers without stable, full time employment, or that are stillunemployed,” he said.

The MBA economist said that on a seasonally adjusted basis thelargest increases in delinquency were in the subprime fixed and ARMcategories, “typically sensitive to income and payment shocks, andlikely even more so in the current economic environment.”

The delinquency rate includes loans that are at least onepayment past due but does not include loans in the process offoreclosure. The percentage of loans on which foreclosure actionswere started during the 1st quarter was unchanged at 0.70%, thelowest level since the 2nd quarter of 2007, and was down 26 basispoints from one year ago, the MBA said.

The percentage of loans in the foreclosure process at the end ofthe 1st quarter was 3.55%, the lowest level since 2008, down 19basis points from the 4th quarter.

The serious delinquency rate, representing loans that are 90days or more past due or in the process of foreclosure, was 6.39%,a decrease of 39 basis points from last quarter.

The combined percentage of loans at least one payment past dueor in foreclosure was the lowest in more than four years,decreasing to 10.30% on a non-seasonally adjusted basis, 95 basispoints lower than last quarter, the MBA said.

“We are seeing substantial improvements in the foreclosuresituation nationally and in many states. The foreclosureinventory measure decreased in 40 states, with states like Florida,California, and Nevada leading the declines,” Fratantoni said.

“States with a judicial foreclosure system continue to bear adisproportionate share of the foreclosure backlog,” he said.

While the average percentages of loans in foreclosure dropped inboth states with judicial systems and states with non-judicialsystems, the average rate for judicial states was 5.96%, triple theaverage rate of 1.99% for non-judicial states, the MBA economistsaid.