Mortgage Delinquencies Slip; Leveling Off Forecast

Mortgage delinquenciesThe mortgage loan delinquency rate – borrowers who are late by 60 days or more – slipped slightly in the first quarter of 2010, compared to the previous quarter – the first decline in 12 consecutive quarters, according to TransUnion.
The credit reporting firm said the delinquency rate decreased 1.74 percent to a rate of 6.77 percent, down from the fourth quarter’s 6.89 percent average. 
So-called later-stage delinquencies, those borrowers 90 to 120 days late, showed the smallest increase since the recession began in the fourth quarter of 2007, indicating a leveling off, TransUnion said.
However, the 60-day mortgage delinquencies are still up nearly 30 percent from a year ago, when they stood at 5.22 percent.
The average mortgage debt decreased 0.47 percent to $192,774, from the previous quarter’s $193,690.
Mortgage delinquency rates in the first quarter again were highest in Nevada (15.98 percent) and Florida (14.65 percent). The lowest rates were in North Dakota (1.76 percent), South Dakota (2.44 percent) and Nebraska (2.68 percent).
TransUnion is holding to its forecast that mortgage delinquency rates will be leveling off in mid 2010.
“Based on revised economic assumptions, which are now more optimistic than before, TransUnion believes that the 60-day mortgage delinquency rate will likely continue to drop in 2010, possibly to as low as 6.3 percent,” F.J. Guarrera, vice president in TransUnion’s financial services business unit.
But Guarrera cautions that the projection may have to be modified if there are any “unanticipated shocks” to the economy affecting the housing market recovery.
Florida is anticipated to see the highest mortgage delinquency rate by the end of 2010, possibly reaching 18.2 percent, TransUnion said.

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