The delinquency rate for mortgage loans on one- to four-unit residential properties in California decreased during the fourth quarter of 2003, as did the percentage of mortgages in the foreclosure process, according to the California Mortgage Bankers Association.

The delinquency rate for loans on one- to four-unit residential properties in California declined 13 basis points to 2.68 percent during the fourth quarter. The percentage of loans in which foreclosure was started during the quarter fell 1 basis point to 0.18 percent, while the percentage of loans in the foreclosure process at the end of the quarter fell 3 basis points to 0.37 percent.

“In the fourth quarter, we see some leveling off of delinquencies as energy prices have subsided and low interest rates have sparked a mortgage origination and refinance wave,” said Matthew M. Soto, CMBA chairman. “The spike in delinquencies came in the fourth quarter of 2000, when rising energy prices cut into homeowners’ disposable income and ability to pay.”

The delinquency rate varied for each of the three loan types during the fourth quarter. The rate of conventional loans was 1.95 percent, down 6 basis points from the previous quarter, and the rates for FHA and VA loans were 11.87 percent and 7.6 percent–up 25 basis points for FHA loans and down 12 basis points for VA loans.

The inventory of loans in the foreclosure process in California at the end of the quarter varied by loan type as well. The percentage of conventional loans in foreclosure decreased 2 basis points to 0.26 percent, and the percentage of FHA loans in foreclosure decreased 3 basis points to 1.7 percent. The percentage of VA loans in foreclosure remained steady at 0.96 percent.

On a national level, the seasonally adjusted delinquency rate on one- to four-unit residential properties was 4.49 in the fourth quarter, down 16 basis points from the last quarter. The seasonally adjusted percentage of loans in which foreclosure was started during the quarter rose 1 basis point to 0.45 percent, while the percentage of loans in the foreclosure at the end of the quarter rose 5 basis points to 1.29 percent.

CMBA is an association representing the state’s real estate finance industry.

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