U.S. mortgage delinquencies rise from 10-year low: MBA

More U.S. homeowners fell behind on their mortgage payments in the final quarter of 2016, raising the level of delinquent home loans from its lowest level in a decade, the Mortgage Bankers Association said on Wednesday.

At the same time, fewer homeowners saw their loans go into foreclosure last quarter, sending the level of new foreclosures to its lowest since the fourth quarter of 1988, the Washington-based industry group said.

The latest figures on delinquency and foreclosure rates, which are predictors on defaults, suggested homeowners remain in solid shape to meet their debt obligations, according to MBA.

"It is not unexpected that delinquencies could eventually increase off such a low base. We continue to see strong fundamentals in the overall economy, such as rising home values and increased employment, which bodes well for the future performance of" various types of mortgages, Marina Walsh, MBA's vice president of industry analysis, said in a statement.

Reuters - Richard Leong - 15 February 2017

Overall household indebtedness "have remained within historical norms" in the third quarter of 2016 despite a recent pickup in delinquencies in subprime auto loans, a Federal Reserve report released on Tuesday showed.

Within the mortgage sector, delinquencies on loans for one-to-four-unit homes on a seasonally adjusted basis increased for the first time since 2013 to 4.80 percent of all home loans outstanding at the end of the fourth quarter.

They were up 28 basis points from the previous quarter when they hit their lowest level since 2006 and were three basis points higher than a year earlier.

Seasonally-adjusted delinquency rates on mortgages insured by the Federal Housing Administration rose to 9.02 percent in the fourth quarter, up from the third-quarter's 8.30 percent which was the lowest since 1997. The fourth-quarter delinquency rate showed no increase on a year-over-year basis.

Delinquencies on home loans backed by the Department of Veterans Affairs rose to 4.00 percent from the prior quarter's 3.89 percent which was the lowest since 1979. The delinquency rate in the fourth quarter was 12 basis points lower than a year ago.

The share of loans on homes that began foreclosure in the fourth quarter of 2016 was 0.28 percent, down 2 basis points from the previous quarter, and 8 basis points lower than a year ago. This is the lowest rate of new foreclosures started since the fourth quarter of 1988.

New Jersey and New York remained the two U.S. states with the highest percentage of loans in foreclosure at 5.42 percent and 4.28 percent, respectively. But they continued to show improvement from the previous quarter, MBA said.