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The delinquency rate for mortgage loans fell to its lowest level since 2008 at the end of the fourth quarter of 2012. The seasonally adjusted delinquency rate of 7.09% was down 31 basis points sequentially and 49 basis points lower than the 2011 delinquency rate. The loans were made for one-to-four unit residential properties.

The data was published today by the Mortgage Bankers Association (MBA). The delinquency rate includes loans at least one payment past due but not yet in foreclosure.

Only 0.7% of loans went into the foreclosure process during the fourth quarter of 2012, the lowest level since the second quarter of 2007. Similarly, the percentage of loans in the foreclosure process fell to 3.74%, down 33 basis points sequentially and 64 basis points year-over-year, the lowest level since the fourth quarter of 2008.

The MBA’s chief economist noted:

The foreclosure starts rate decreased by the largest amount ever in the MBA survey and now stands at half of its peak in 2009. Similarly, the 33 basis point drop in the foreclosure inventory rate is also the largest in the history of the survey. … The two biggest factors impacting the number of loans in the foreclosure process still are the magnitude of the problem in Florida and the judicial foreclosure systems in some states. 12 percent of the mortgages in Florida are in the process of foreclosure, down from a peak of 14.5 percent last year but still an extraordinarily high rate that is impacting the national rate.

Hurricane Sandy also had some impact on the fourth quarter data from New York, New Jersey, and Connecticut because the MBA asks lenders to report loans in forbearance as delinquent. The MBA expects the numbers to improve in these states as time passes this year.