Mortgage Delinquency Rate Down Nearly 14% in 2012: TransUnion

Mortgage Delinquency Rate Down Nearly 14% in 2012: TransUnionThe national mortgage delinquency rate, which refers to the rate of borrowers 60 days or more past due, declined on a year-over-year basis nearly 14 percent in the fourth quarter of 2012.
The fourth quarter also marked the fourth consecutive quarter decline, dropping from 5.41 percent in Q3 2012 to 5.19 percent in Q4 2012.
During the height of the mortgage crisis, delinquencies rose 54 percent in 2007, 53 percent in 2008 and 50 percent in 2009.
The subsequent decline has been a slow process with delinquency levels dropping 7% in 2010, 6 percent in 2011 and now falling 14 percent in 2012.
“The national mortgage delinquency rate experienced its largest yearly decline since the conclusion of the recession, though we still remain far above normal levels,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit.\
Newer mortgage loans are not the reason for the stubbornly high delinquency rate, Martin said. They are performing relatively well.
The elevated delinquency levels are a result of older vintage loans — “borrowers who haven’t been making their payments for a rather long time that are still in the system, inflating the overall rate,” he said.
Thirty-seven states and the District of Columbia saw improvement in their mortgage delinquency rates from the previous quarter. Only three states did not experience mortgage delinquency improvement from last year.
TransUnion expects the mortgage delinquency rate to continue its downward trend in the first quarter of 2013, though it will likely remain above 5 percent.
“The declines in the mortgage delinquency rate will likely be muted for the foreseeable future as the foreclosure process in some states can take more than 1,000 days,” said Martin. “It’s not clear yet, but recently announced regulatory rules related to mortgage servicing may tend to slow down this process further.”

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