NEW YORK The delinquency rate on U.S. home mortgages fell in the fourth quarter to the lowest level since 2008 as the housing market improved, an industry group said on Thursday.
The seasonally adjusted delinquency rate on all loans fell to 7.09 percent from 7.40 percent in the third quarter, and was down from 7.58 percent in the fourth quarter of 2011, according to a report from the Mortgage Bankers Association.
It was the lowest level since the third quarter of 2008. The delinquency rate includes loans that are at least one payment behind, but are not yet in foreclosure.
"It's a sign of considerable movement in the right direction," said Jay Brinkmann, MBA's chief economist and senior vice president of research.
"In many ways, it's getting back to normal levels but not knowing what those normal levels necessarily are."
The number of loans in the foreclosure process at the end of the fourth quarter also improved, falling to 3.74 percent from 4.07 percent and down from 4.38 the year before. It was also the lowest level since 2008.
There was a significant divergence between states that use the court system to process foreclosures and those that do not. While the percentages of loans in foreclosure dropped in almost all states, the average rate for judicial states was 6.2 percent, compared to an average rate of 2.1 percent for nonjudicial states.
Nationally, there were fewer homes entering foreclosure, with 0.7 percent seeing foreclosure actions started in the fourth quarter on a seasonally adjusted basis, down from 0.86 percent the quarter before.
The number of homes considered "seriously delinquent" - at least 90 days behind on payments or in the foreclosure process - fell to 6.78 percent from 7.03 percent.
(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)