FDIC: Mortgage delinquency rate drops to lowest level since 2009

The combined delinquency rate on mortgages held by major banks dropped to 6.68% in the second quarter, the lowest level since the third quarter of 2009, according to Federal Deposit Insurance Corp. data.

The FDIC insures deposits at 7,513 national banks. In the second quarter, bank failures slowed, the "Problem List" of troubled banks shrunk, net income rose and the FDIC's Deposit Insurance Fund turned positive for the first time in two years.

Work on bank mortgage books continued as well. The dollar amount of loans between 30 days and 90 days delinquent dropped for seventh consecutive quarter to $70 billion, the lowest level since the fall of 2007.

It was a 10% reduction from the previous quarter. One year ago, banks reported nearly $100 billion in these early-stage delinquencies.

The banks reported $102 billion in principal balance more than 90-days delinquent, according to the FDIC, down 2.6% from the previous quarter and down 3.5% fro one year ago.Nationwide Foreclosures!

Still, the early and late stage delinquencies added up to more than $172 billion in mortgages sit in nonaccrual status. The banks also reported another $12 billion the carrying value of REO, or previously foreclosed, property.

Banks held $25 billion in nonaccrual mortgages before the crisis at the end of 2006.

"Recent events have reminded us that the U.S. economy and U.S. banks still face serious challenges ahead," Acting Chairman Gruenberg concluded. "The FDIC will remain alert to these challenges going forward."