Mortgage Delinquencies at All-Time High

By:
Peter King | November 17, 2009

Mortgage delinquency rates hit an all-time high in the third quarter of the year, with 6.25 percent of borrowers at least 60 days past due on their home loans.

Mortgage delinquencies have now risen for 11consecutive quarters, according to figures released today by credit reporting firm TransUnion. However, the company noted that the rate of increase has been slowing for three quarters now, even though delinquencies as a share of total mortgages are at an all-time high.
 
The new figures represent an increase from 5.81 percent the previous quarter and up from 3.96 percent one year ago. The year-over-year figures represent a 58 percent increase in total delinquencies.
 
TransUnion predicts that mortgage delinquency rates will continue to rise to just under 7 percent by year’s end, and will not begin to decline until the first half of 2010.
 
"While it continues to be a positive sign that the increase in mortgage borrower delinquency rates has slowed for three consecutive quarters, we have to keep things in perspective,” said  F.J. Guarrera, TransUnion’s vice president of financial services. “Delinquency rates are rising and expected to peak at record levels. Until the housing market can consistently demonstrate several months of home value appreciation and the unemployment rate improves, mortgage delinquency will likely continue to rise."
 
Mortgage loan delinquencies, defined in the TransUnion report as borrowers 60 days or more past due on their loans, are considered a precursor to foreclosures, and hints that the foreclosure rate will likely continue to rise as well.
 

Nevada, Florida still have highest delinquency rates

 
Nevada and Florida, the states that have seen the biggest drops in home values the past three years, continue to lead the nation in mortgage delinquencies as well, at 14.5 and 13.3 percent of outstanding loans, respectively. The lowest delinquency rates, of 2.6 percent or less, were posted by the two Dakotas and Vermont.
 
The greatest increases in delinquencies were posted by Wyoming (up 17.9 percent), Kansas (17.4 percent) and North Dakota (up 16 percent), all states that so far have escaped the worst effects of the foreclosure crisis.
 
Areas showing the greatest percentage growth in delinquency from the previous quarter were Wyoming (+17.9 percent), Kansas (+17.4 percent) and North Dakota (+16 percent). Bright spots for the quarter included the District of Columbia, showing a decline in mortgage delinquency rates, down 0.19 percent from the previous quarter.
 
Average debt per borrower declined 0.36 percent in the third quarter, to $193,121, from $193,811 in the second quarter. Compared to the third quarter of 2008, average mortgage debt is up 0.43 percent, from $192,287.
 
The TransUnion report is based on data culled from an anonymous random sampling of approximately 27 million individual credit files, representing approximately 10 percent of credit-using U.S. consumers.
 
 

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