As the effects of the recent financial crisis are still on the minds of many consumers, homeowners or potential homeowners are careful not to bite off more than they can chew. With this new mindset, default rates for credit cards and other financial tools have been decreasing as owners are realizing the potential damages that resulted in 2008. At the same time, there is still a lot of uncertainty regarding the future of the lending industry and how lenders are adjusting to having less resources than before. Fortunately, with credit and risk management tools, financial institutions can find more information about applicants and borrowers and make better decisions regarding their qualifications.
One example of the still-recovering industry can be found in the Mortgage Bankers' Association (MBA) recent National Delinquency Survey. The MBA found that in the first quarter of this year, the number of mortgages that were either in foreclosure or one payment past due fell to their lowest level in four years. The report also said that the number of homes in foreclosure decreased in 40 states.
While this is clearly positive news, the MBA also found that the mortgage delinquency rate, which does not include homes in the foreclosure process, increased in the first quarter, compared to 2012. Additionally, there were 33 states that had an increase in foreclosure starts, again pointing to the "uneven nature of the economic recovery," as an article in American Banker pointed out.
"We remain in a period of slow and uneven economic and job growth in the U.S. and there are still many borrowers without stable, full-time employment, or that are still unemployed," Michael Fratantoni, the MBA's vice president of research and economics, said in the report.