The Mortgage Bankers Association said the rate of homes with payments 30 days past due improved from 8.3 percent, the delinquency rate at the end of the January through March period of 2011.
Homes involved in foreclosure at the end of the quarter was 4.39 percent, up one basis point from the fourth quarter of 2011 and down 13 basis points from the first quarter a year earlier.
Contracts with payments 30 days late or in foreclosure came to 11.8 percent, down from 12.8 percent in the first three months of 2011 and down from 14.7 percent in the same period of 2010.
Homes in serious delinquency with mortgage payments 90 days or more past due was 7.44 percent in the quarter, the MBA said.
"Mortgage delinquencies normally fall during the first quarter of the year, but the declines we saw were even greater than the normal seasonal adjustments would predict, so delinquencies are clearly continuing to improve," said Michael Fratantoni, MBA's Vice President of Research and Economics.
"Newer delinquencies, loans one payment past due as of March 31, are down to the lowest level since the middle of 2007, indicating fewer new problems we will need to deal with in the future," he said in a statement.
While delinquency rates are falling, foreclosure rates remain high, however, mostly due to a bottleneck of processing in states that require a court review of a foreclosure.
"The problem continues to be the slow-moving judicial foreclosure system in some of the largest states," Fratantoni said.
Forty-one states had decreases in foreclosure starts and 22 states had declines in the percentage of loans in foreclosure. However, 4.4 percent of homes were involved in foreclosures at the end of the first quarter.
In addition, the MBA said loans originating at the peak of the housing boom "continue to comprise the majority of the problem loans."
The peak of the housing boom correlates with the "low point in credit standards," the MBA said.