BAD LOANS TO FOUR YEAR LOW

From The Wallstreet Journal.

By Nick Timiraos

The number of U.S. mortgages that were behind on their payments or in foreclosure in March fell below the 5 million mark for the first time since 2008, according to a report released Tuesday.

The number of loans in the foreclosure process fell to just below 1.69 million in March, the lowest level in nearly four years, according to Lender Processing Services. That was down by almost 20% from one year ago. Overall, around 3.4% of all U.S. mortgages were in foreclosure at the end of March, down from 4.2% a year ago.

Foreclosures have been falling because fewer borrowers are falling behind on their payments and because banks have been more aggressive about modifying loans or approving short sales, where properties are sold before the bank completes foreclosure.

Another almost 3.31 million loans were behind on their payments in March, with around 1.47 million of those that had missed at least three payments. The level of delinquent loans was down by 3% from a year ago, with around 6.6% of all borrowers in some stage of delinquency, excluding those in foreclosure.

Delinquencies tend to fall in March because homeowners use year-end bonuses and tax refunds to help catch up on their mortgages.

Before the housing crisis, around 5% of borrowers were delinquent on their mortgages and another 1% of loans were in foreclosure. The latest data show that while delinquencies and foreclosures are moving in the right direction, it’s probably going to take a few more years before delinquencies and foreclosures get back to pre-crisis levels.