You may be seeing fewer home foreclosures in your neighborhood in the future because mortgage late payments have fallen to their lowest level in 11 years, according to Lender Processing Services, which processes data on nearly 40 million mortgages.

About 6% of U.S. borrowers were late on their mortgages in May, said LPS Applied Analytics Senior Vice President Herb Blecher.

“Though they are still approximately 1.4 times what they were, on average, during the 1995 to 2005 period, delinquencies have come down significantly from their January 2010 peak,” Blecher said.

“In large part, this is due to the continuing decline in new problem loans — as fewer problem loans are coming into the system, the existing inventories are working their way through the pipeline. New problem loan rates are now at just 0.73%, which is right about on par with the annual averages during 2005 and 2006, and extremely close to the 0.55% average for the 2000-2004 period preceding.”

The number of homeowners who were underwater — meaning they owed their lender more than their home was worth — also fell to 7.3 million loans. That’s less than 15% of all homeowners with a mortgage and marks a 50% decline in underwater mortgages since last year, Blecher said.

Underwater homeowners are more likely to give up their homes to foreclosure than homeowners who have built up equity.