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Record Delinquency, But Rate of Increase Eases

Mortgage News

The bad news is that residential delinquency climbed to its highest level on record. But the good news is that the rate of deterioration slowed.

Mortgage delinquency of at least 60 days was 6.25 percent in the third quarter, TransUnion reported today.

The level of late payments was the highest ever. In addition, it was the 11th consecutive quarter that delinquency increased.

But the credit repository noted that the rate of increase slowed.

Late payments were 5.81 percent in the second quarter. A year earlier, delinquency was 3.96 percent.

The report was based on around 27 million anonymous credit files that were randomly sampled. The database, which includes 200 credit variables, reportedly represents approximately 10 percent of credit-active U.S. consumers.

Nevada’s delinquency rate was higher than any other state: 14.5 percent. In the prior report, late payments in the Silver State stood at 13.8 percent.

Florida followed at 13.3 percent, 100 basis points higher than the previous period.

North Dakota’s 1.7 percent was the lowest of any state. Still, North Dakota was higher than 1.5 percent in the prior quarter.

The average mortgage debt per U.S. borrower was $193,121, according to the report. The average was lower than $193,811 three months earlier but more than $192,287 a year earlier.

Average mortgage debt was $359,788 in Washington, D.C., higher than any of the 50 states. California trailed closely with $354,510, then Hawaii’s $312,844.

TransUnion executive FJ Guarrera predicted that the economic peaks and valleys seen during the third quarter will likely continue into the first half of next year. He forecasts near 7 percent delinquency by yearend and said the company doesn’t project a decline in national delinquency “until the first half of 2010.”

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