Last week, the Mortgage Bankers Association released data for the fourth quarter of 2010 for the National Delinquency Survey. The results show continued high levels of mortgage loans in the foreclosure process but declines in delinquencies of loan payments.

 Jay Brinkman, MBA’s Chief Economist stated:

These latest delinquency numbers represent significant, across the board decreases in mortgage delinquency rates in the US. Total delinquencies, which exclude loans in the process in foreclosure, are now at their lowest level since the end of 2008. Mortgages only one payment past due are now at the lowest level since the end of 2007, the very beginning of the recession.

The share of loans more than 90 days overdue saw the most significant declines: down from a peak of 5.02% in the first quarter of 2010 to 3.63% in the fourth quarter. The share of loans in the 60 day overdue category has now fallen from 1.82% of loans in the first quarter of 2009 to 1.34% of loans in the fourth quarter of 2010.

The total past due rate has fallen from its peak of 10.06% in the first quarter of the year to 8.22% in the final quarter of 2010.

However, the share of loans in the foreclosure process remains high. The share increased from 4.39% in the third quarter of 2010 to 4.63% in the fourth quarter, matching the previous high of 4.63% in the first quarter of 2010.

Geographically, foreclosures and delinquencies are concentrated in several states. The MBA data indicate that the states with the highest shares of mortgages in foreclosure are: Florida (14.2%), Nevada (10.1%), and New Jersey (7.2%). The states with the highest rates of serious delinquency (foreclosures plus 90 days overdue) are: Florida (19.4%), Nevada (17.4%), New Jersey (10.9%), Illinois (10.7%), Arizona (10.6%), California (9.8%), New York (9.1%), Ohio (9.0%), and Michigan (8.9%).

Nationally, the high levels of loans in foreclosure suggest continued price concerns for builders due to distressed home sales competing with new construction. But the declines in the short-term delinquency rates are good news for the emerging recovery in housing.