Mortgage Delinquencies Edge Upward in Third Quarter

November 9, 2011 (Shirley Allen)

Mortgage delinquencies were on the rise across the nation for the first time since the end of 2009 according to TransUnion. The mortgage delinquency rate edged up to 5.88 percent at the end of the third quarter in 2011 from 5.82 in the previous quarter.

The mortgage delinquency rate increased in all but 10 states and Washington D.C. between the second and third quarters of this year. Sixty-four percent of the metropolitan areas posted an increase in delinquency rates compared to only 21 percent in the second quarter and 32 percent in the first quarter of this year.

Despite the increase, the delinquency rate was still lower than in the third quarter of last year when the delinquency rate was 6.44 percent.

“Until this quarter, we had seen six straight quarters where progressively more people were able to make their mortgage payments on time. We expected that trend to continue given recent, relatively more conservative lending policies and the apparent stabilization of both home values and unemployment,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit. “However, in the third quarter, the consumer was hit with several unanticipated shocks, including the U.S. credit rating downgrade, stock price declines, European debt concerns, stubbornly high unemployment, more downward pressure on home values and low consumer confidence. All of this affects a borrower’s net worth and desire, or ability, to continue making house payments — especially if they are facing negative equity in their homes due to price depreciation.”

The state with the highest delinquency rate in the nation was Florida where 14.08 percent of the mortgages were delinquent, followed by Nevada at 12.39 percent and New Jersey at 7.60 percent.

The state with the lowest delinquency rate was North Dakota at 1.17 percent, followed by South Dakota at 2.33 percent and Nebraska at 2.36 percent.

The amount of mortgage debt per borrower remained virtually unchanged from the previous quarter and the previous year. The average mortgage debt per borrower in the third quarter was $190,382 compared to $189,205 in the second quarter and $190,176 in the third quarter of 2010.

Washington D.C. had the highest mortgage debt per borrower at $374,241, while borrowers in West Virginia had the lowest mortgage debt of $101,553.

Tags: TransUnion, mortgage delinquency rate, mortgage debt, mortgage payments, negative equity, price depreciation

Source:
TransUnion