The massive $26 billion mortgage settlement between states and banks is designed to help millions of American homeowners -- but not everyone is eligible.
Delinquent U.S. mortgage payments fell to 7.99 percent in the third quarter, down from 9.1 percent from a year earlier, according to the Mortgage Bankers Association.
It was the lowest level of delinquencies, defined as households that have missed at least one month of mortgage payments, since the recession began at the end of 2008.
The number of borrowers who missed one mortgage payment fell to 3.2 percent in the third quarter from 3.5 percent in the second quarter of 2011, a four-year low.
However, 4.43 percent of households were in foreclosure, slightly more than last year and far above the historical foreclosure rate of 1 percent. The market is at least three to four years away from returning to historic norms, the MBA said.
Foreclosure starts increased to 1.08 percent of all loans, up slightly from the previous quarter, and the first increase this year. The MBA attributed that rise to lenders resuming foreclosure actions after the robosigning scandal.
"While the delinquency picture changed for the better in the third quarter, the foreclosure data indicated that we are not out of the woods yet and that the issues continue to vary by geography," said Michael Fratantoni, MBA's vice president of research and economics, in a statement. "The increase in the foreclosure starts rate this quarter was driven by large increases from just a few servicers, concentrated in certain 'hardest hit' states."
The highest foreclosure rates were in Florida, at 14 percent and New Jersey, at 8 percent. Twelve states had unchanged or lower foreclosure starts in the quarter.
In a separate report, the MBA said that mortgage applications declined by 10 percent on a seasonally adjusted basis in the week ending Nov. 11, compared to the previous week. Refinances decreased 12.2 percent compared to the previous week and purchases were down 14.8 percent.
The average interest rate for 30-year fixed-rate mortgages with balances below $417,500 increased to 4.23 percent from 4.22 percent. The average interest rate for 30-year fixed-rate mortgages above $417,500 decreased to 4.56 percent from 4.57 percent.
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