Mortgage Delinquency Rates Fall in 42 States

by devteam November 13th, 2012 | Share

TransUnion, a big three nationalrnconsumer credit reporting agency, says that mortgage delinquencies of 60 days orrnmore duration declined in the third quarter to 5.41 percent from 5.49 percentrnin the second quarter.  This was thernthird consecutive month that the rate declined and it is now 8 percent lowerrnthan in the third quarter of 2011 when it was 5.88 percent. </p

Rates in 22 states improved from thernsecond quarter and 42 states saw an annual decrease.  However, only 49 percent of metropolitanrnareas improved during the quarter; in each of the first two quarters of 2012rnmore than 70 percent of metropolitan areas showed improvement.  </p

“Continued declines in mortgagerndelinquency rates are a welcome sign and reflect that relatively morernhomeowners are able and willing to make their mortgage payments eachrnmonth,” said Tim Martin, group vice president of U.S. Housing inrnTransUnion’s financial services business unit. “However, we stillrnhave a long way to go to reach more ‘normal’ conditions of a delinquency raternin the 1-2% range for the U.S. average.” </p

The greatest annual improvement inrnthe delinquency rate occurred in two of the states most impacted byrnforeclosures, Arizona and California. rnSince the third quarter of 2011 Arizona’s rate has dropped nearly 25rnpercent to 5.62 percent and California’s rates is down 24 percent to 5.56rnpercent.  The largest increase was in thernDistrict of Columbia where the rate jumped 11 percent to 6.10 from 5.57 percentrnone year earlier.  Eight states alsornexperienced annual increases with New Jersey registering the largest, nearly 10rnpercent to 8.33 percent.  The highestrnrates in the country are in Florida at 13.09 percent and Nevada at 10.93rnpercent but both of these states did show an annual improvement.</p

TransUnion expects the mortgagerndelinquency rate to fall again in the 4th quarter, but onlyrnslightly. “It’s generally tough to expect improvement in delinquencyrnrates in the fourth quarter of the year given the extra demands on householdrnincome that many experience during the holiday season,” said Martin. “However,rnwe saw some improvement in the housing market in the third quarter with regardrnto house prices, home sales and increased refinance activity, and we believe wernwill start to see these numbers reflected in improved mortgage delinquency nextrnquarter. As such, we forecast the year-end delinquency rate to improve tornsomething in the 5.25%-5.35% range.”

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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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