Mortgage Delinquencies Decline, but What Does It Mean?

Stricter lending rules have helped curb the number of mortgage delinquencies. Agencies from the FHA to Fannie Mae and Freddie Mac are reporting a decreasing number of people who are behind on mortgage payments.

But while it seems that mortgage delinquencies have peaked, the number of people still behind on mortgage payments remains high. Anyone looking for good news in the numbers will have to look past the 4.9 million borrowers who haven't made a mortgage payment in at least three months. That number is up from 3.7 million people one year earlier. The Mortgage Bankers Association reports that one in seven homeowners is either paying late or in foreclosure.

The good news on loan default rates from other agencies reinforces the feeling that the worst is over. The Wall Street Journalreported that government-owned Fannie Mae and Freddie Mac loans that were 90 days or more past due fell in March for the first time in three years. Nationally, the number of loans 90 days past due fell slightly last month. The number stands at 9.54 percent, from 9.67 at the end of 2009.

The question, however, is whether the factors that brought about this good news will be sustainable in the coming months. If not, hard-to-get mortgages will be even harder to obtain.