The percentage of loans in the foreclosure process at the end of the third quarter was 2.39%, down 10 basis points from the second quarter and 69 basis points lower than one year ago.

"Delinquency rates and the percentage of loans in foreclosure fell to their lowest levels since 2007," Mike Fratantoni, MBA's chief economist, said. "We are now back to pre-crisis levels for most measures. Foreclosure starts were unchanged on a seasonally adjusted basis, but increased slightly in the raw data."

He added, "Given that this measure reached the lowest level in eight years last quarter, and given the continued decline in delinquency and foreclosure inventory rates, we expect that the increase in the unadjusted starts rate is just regular seasonal fluctuation."

Fratantoni said the seriously delinquent rate fell by 15 basis points last quarter and has dropped 100 basis points over the past year.

The loans that were seriously delinquent, either more than 90 days late or in the foreclosure process, were primarily loans that were made prior to the downturn, he noted. Seventy-four percent of them were originated in 2007 or earlier.

"Loans made in recent years continue to perform extremely well due to the improving market and tight credit conditions; loans originated in 2012 and later accounted for only four percent of all seriously delinquent loans," Fratantoni said.