Feb
16
The percentage of borrowers at least 60 days past due on their mortgage increased for the 12th straight quarter, hitting 6.89 percent by the end of 2009, according to new data released by TransUnion Tuesday. That’s an all-time high in the credit bureau’s study, dating back to 1992.
This statistic, which is traditionally seen as a precursor to foreclosure, increased 10.24 percent from the previous quarter’s 6.25 percent average. Compared to the year-ago delinquency rate of 4.58 percent, past due mortgages are up a staggering 50 percent, TransUnion said.
The Chicago-based company called the recent slowing in the pace delinquency increases “short-lived.” What was starting to become a trend came to an abrupt end in the fourth quarter, when the mortgage delinquency rate accelerated instead of decelerated as it had done since the beginning of 2009.
Based on TransUnion’s analysis, borrower delinquency rates last quarter continued to be highest in Nevada (16.19 percent) and Florida (14.93 percent). North Dakota (1.84 percent), South Dakota (2.46 percent), and Alaska (2.84 percent) continued to produce the nation’s lowest mortgage delinquency rates.
Areas showing the greatest percentage growth in delinquency from the previous quarter were the District of Columbia (+20.2 percent), Louisiana (+17.7 percent), and Delaware (+14.8 percent). Unlike last quarter, no state showed a decrease in mortgage delinquency rates from the previous period.
The news was not altogether bad, though, as bright spots appeared at the metropolitan level. Thirty-eight metro areas showed a decrease in their mortgage loan delinquency rates since third quarter, with Corvallis, Oregon heading the pack. This compares to only 27 metros that showed a quarterly decrease in delinquency last year between the third and fourth quarters.
“Variations in delinquency highlight the fact that the recession and the eventual recovery are both regional phenomena tied for the most part to localized house price conditions and unemployment levels,” said FJ Guarrera, VP of TransUnion’s financial services business unit.
“We’re not out of the woods yet,” Guarrera added. “The continuing rise in foreclosures, in conjunction with low consumer confidence in the housing market, continues to hinder housing value appreciation and impede recovery in the mortgage industry. Furthermore, there is wave of adjustable rate mortgages (ARMs) that have yet to reset.”
For these reasons, Guarrera explained that TransUnion’s forecasts for 2010 are slightly more pessimistic than they have been in the past. The credit bureau is expecting the 60-day mortgage delinquency rate to peak between 7.5 and 8 percent over the course of this year.
With regard to regional forecasts, Nevada is still anticipated to experience the highest mortgage delinquency rate by mid-2010, reaching as high as one in five mortgage borrowers.
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