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Early Stage Delinquency Improves

Mortgage News

After two months of increases, a new report indicates that late payments on residential loans retreated. The report highlights a contrast between mortgage and non-mortgage credit markets.

In September, 30-day delinquency increased 3 basis points. That followed an 8-basis-point rise in August.

But last month, past-due payments plunged 11 BPS, according to CreditForecast.com from Moody’s Analytics and Equifax. The statistics reflect activity on all home loans and are based on Equifax’s database.

That left the 30-day rate at 6.54 percent.

A report yesterday from Standard & Poor’s and Experian indicated that 90-day delinquency on first mortgages was up for the second consecutive month to 2.08 percent in October. The CreditForecast.com data suggests that 90-day delinquency in might retreat this month or in December.

The combination of easing lending standards and the re-acceleration of economic growth will bring and end to deleveraging and
support credit quality into 2012, according to the CreditForecast.com report.

“There remains a dichotomy in credit conditions, however,” the report said. “Mortgage balances are falling steadily, and mortgage delinquencies remain high by pre-recession standards. By contrast, nonmortgage balances have been rising in recent months, despite the midyear slowing in nominal spending, and delinquencies, especially those in the early stage, are very low.

“Credit is becoming modestly more available, unlike the mortgage market, where the reduction in limits for loans involving government-sponsored entities declined in October, undermining availability further.”

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