The recent recession has forced many consumers to fall behind on bill payments and become submerged in overwhelming debt. However, the latest quarterly statistics from the Mortgage Bankers Association indicate that some homeowners may be improving their financial standings and getting on top of their home loan payments.
The non-seasonally adjusted delinquency rate dropped 1.17 percentage points to 7.79 percent during the first quarter of the year, when compared to the previous quarter.
Jay Brinkmann, the MBA's chief economist, said the positive numbers suggest the mortgage market is beginning to recover.
“Of particular importance is that the drop in the percentage of loans 90 days or more past due was driven by improving numbers for loans originated between 2005 and 2007," he said. "Given that loans originated during this period are now past the point where loans normally default, and that loans originated since then generally have better credit quality, mortgage performance should continue to improve."
Some consumers may now have the better credit quality they need to qualify for a mortgage because they were able to fix problematic items on their credit reports. Any marks that appear on a person's file that are either inaccurate or unverifiable may be challenged and potentially removed from a report. This means some consumers may have the right to legally remove negative marks from their records – an action that may help boost their scores.