TransUnion: Mortgage, Credit Card Delinquencies to Decline in 2010

Gallery.creditcard2TransUnion, one of the three credit bureaus, is forecasting gradual declines in mortgage and credit card delinquencies by the end of 2010,  in anticipation of a slowly improving picture for jobs and housing values.
In its annual consumer credit forecast, TransUnion says national mortgage loan delinquencies, the ratio of borrowers 60 or more days past due, will drop about 3 percent by the end of 2010 to 6.39 percent, from an expected 6.56 percent at the end of 2009. The projected decrease would bring to an end unprecedented year-over-year increases of 54 percent from 2006 to 2007; 53 percent from 2007 to 2008; and 43 percent from 2008 to 2009.
“We believe the nation will see a turnaround in mortgage delinquencies in the coming year,” said Ezra Becker, director of consulting and strategy in TransUnion’s financial services group. “Tied directly to anticipated unemployment rates and housing values, the decrease in delinquencies should be gradual.
Credit card delinquency rates – the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards – will see a third straight year-over-year decrease from 1.07 percent at the end of 2009 to 1.04 percent at the conclusion of 2010, TransUnion forecasts. The projected 2.80 percent year-over-year decrease is significantly less than the 11 percent and 11.6 percent declines seen from 2007 to 2008, and from 2008 to 2009, respectively.
The forecast year-end 2010 delinquency rate would mark a 23.6 percent decrease from the same period in 2007 (1.36 percent).
“We anticipate that credit card delinquencies will decrease for the third straight year as consumers continue to keep incremental debt to a minimum and aggressively manage debt repayment,” Becker said. “However, the decrease is projected to be smaller than in previous years, indicating that this might be the best consumers can do in managing delinquencies in the current economic environment,” said Ezra Becker, director of consulting and strategy in TransUnion’s financial services group.
The source for TransUnion’s analysis is its database of 27 million anonymous consumer records randomly sampled every quarter. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance.
Since 1992, TransUnion has been aggregating this information at local and national levels.
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