Trepp: Delinquencies Improving Slowly

Trepprnhas come out with preliminary estimates for third quarter real estate andrnbusiness loan delinquencies.  While finalrnreports from banks will not be available until the end of the month, Trepp hasrnpulled together its figures from small bank earnings reports and call reportrnfilings.   </p

The overall delinquencyrnrate for single-family mortgages edged down to an estimated 12.0 during thernthird quarter from 12.3 percent in the second quarter and 13.1 percent a yearrnago and seriously delinquent loans (non-accrual rates) will be at 5 percent,rnthe same level as the fourth quarter of 2009. rn Trepp says the situation isrnimproving only slowly because of the high volume of foreclosure and weak pricerntrends.  “Recovery in the market looksrnlike it will take a protracted period of time, probably measured in yearsrnrather than weeks or months.”</p

Commercialrnmortgage delinquencies will fall to an estimated 4.6 percent from 4.9 percentrnin Quarter Two and the nonaccrual rate will decline to an estimated 3.4rnpercent.  The rate of improvement inrnQuarter Three was slower than in the previous quarter because efforts byrnlenders to shed nonperforming assets are being hampered by a weaker economy.</p

Therndelinquency rate for non-real estate commercial loans is estimated at 1.9rnpercent compared to 2.2 percent the previous quarter, the first time this rate hasrnbeen below 2 percent since the fourth quarter of 2008.  The delinquency rate for construction lendingrnis also retreating and is estimated to be at 15.6 percent in the third quarter,rnthe lowest rate since the first quarter of 2009.  Early results indicate that most of thernimprovement is in the residential construction sector; there was little change inrnland and commercial construction delinquencies.

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