Mortgage Delinquencies Improve at Record Pace

by devteam May 8th, 2013 | Share

The decline in mortgage delinquenciesrnappears to be picking up speed according to TransUnion’s quarterly delinquencyrnreport.  The national rate of loans 60 orrnmore days past due fell 21 percent from the first quarter of 2012 to the firstrnquarter of 2013, from 5.78 percent to 4.56 percent.  However, over half of that movement occurred subsequentrnto the fourth quarter of 2012 when it was 5.19 percent, a quarter over quarterrnchange of -12 percent. </p

TransUnion said that both thernquarter-over-quarter and year-over-year changes in rates were the largest improvementsrnit had observed since it first began tracking that data in 1992.   Tim Martin, group vice president of U.S.rnHousing in TransUnion’s financial services business unit, called the change the<bfirst major decline in the national delinquency rate since the advent of thernhousing crisis and said, “We certainly expected improvement this quarter,rnas the housing sector is in recovery, but the magnitude of the improvement wasrnunexpected.”</p

Everyrnstate and the District of Columbia experienced an annual improvement in theirrnmortgage delinquency rates.  Arizonarn(-37.9%) and California (-36.6%) had the largest drop but Colorado (-28.5%),rnMichigan (-28.1%) and Minnesota (-25.7%) also recorded big declines.</p

Ninety-one percent of the metropolitanrnareas (MSAs) tracked by TransUnion also posted year-over-year improvementsrncompared to 81.4 percent in the fourth quarter of 2012.  Fifteen of the top 25 performing MSAs were inrnCalifornia with changes as large as -44.3 percent in San Jose and -39.2 in SanrnFrancisco.  </p

“The housing sector as a whole<bhas definitely been improving with prices up, negative equity down and ratesrnstaying low,” Martin said. “That seems to have helped borrowersrnthis quarter, some of whom have been delinquent for a rather long time, workrntheir way out of the system at a faster pace.” </p

TransUnion says it expects the downwardrntrend in delinquencies to continue.  Itrnprojects a rate of 4.5 percent by the end of the second quarter. </p

“There is no reason to believernthe decline in mortgage delinquencies will not continue,” saidrnMartin. “All housing data point to further improvements in therndelinquency rate, though as in the past few years, this also will hinge on howrnquickly older vintage loans clear through the system. We do not know ifrnthe first quarter was a blip, or if it’s the beginning of a more rapidrndecline.” 

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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