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West Outperforms East as U.S. Delinquency Deteriorates

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The level of late payments on mortgages secured by Arizona and California properties has declined at least 200 basis points over the past year — the best performances of any states. But New Jersey and Vermont put in the worst performance. U.S. delinquency, meanwhile, rose in the final quarter of 2011 and might rise again.

The 60-day delinquency rate was 6.01 percent in the fourth quarter, TransUnion reported Tuesday.

The Chicago-based firm determined the delinquency statistics using a database of 27 million consumer records each with 200 credit variables.

The default rate rose for the second straight quarter from 5.88 percent as of Sept. 30, 2011. But the increase was no surprise; TransUnion predicted in the prior report that delinquency would rise in the fourth quarter, though only to 5.95 percent.

TransUnion Group Vice President of U.S. Housing Tim Martin explained in the latest summary that rising late payments in the fourth quarter had been seasonal prior to the recession. He suggested that borrowers might be trying to balance holiday spending with debt payments.

Martin also pointed to declining home prices and “stubbornly high” unemployment.

“This combination leads to more negative equity in homes and reduced real personal income that can affect borrowers’ ability and willingness to pay their mortgages,” Martin said.

Delinquency fell from 6.41 percent in the fourth-quarter 2010, though Martin explained at that pace “it will take a very long time for mortgage delinquencies to get back to normal.”

While the credit repository expects rates to drift down this year, the rate might rise in one or two quarters. That is a bleaker outlook that three months ago, when TransUnion predicted past-due payments would rise in the first quarter then fall each quarter after that.

Florida’s 14.27 fourth-quarter rate was the highest of any state. But the Sunshine State improved from the third quarter’s 14.08 percent.

No. 2 Nevada also saw delinquency fall, to 12.08 percent from 12.39 percent.

New Jersey’s rate was 8.32 percent as of Dec. 31, 2011, the third-highest of any state. What’s worse is that Garden State delinquency leapt 72 basis points from three months earlier and was 89 BPS higher than a year earlier — the biggest annual increase of all states.

The state with the second-biggest year-over-year rise was Vermont, which climbed 34 BPS to 3.40 percent.

No. 4 Arizona, meanwhile, edged up 4 BPS from the third quarter to 7.50 percent but improved 220 BPS from the fourth-quarter 2010 — the best performance of any state compare to a year previous.

Similarly improved was California, where late payments fell 200 BPS from the end of 2010 to 7.14 percent.

The lowest fourth-quarter delinquency rate could be found in North Dakota: 1.50 percent.

U.S. borrowers saw their average mortgage debt fall to $188,194 from the third quarter’s $190,382. The average was $189,046 in the same quarter a year prior.

At $375,563, Washington, D.C.’s, average mortgage debt was highest, while $114,345 in Arkansas was the lowest.

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