Home/Mortgages/Mortgage Delinquency Rates Drop in All States But One

August 12, 2011 (Shirley Allen)

Forty-nine states and the District of Columbia experienced declines in mortgage delinquency rates during the second quarter of 2011 according to data released by credit reporting giant TransUnion.

It was the sixth consecutive quarter that the national mortgage delinquency rate (based on the rate of borrowers 60 or more days past due) decreased, dropping to 5.82 percent.

It was also the largest improvement in quarter-over-quarter delinquency rates since the recession officially ended two years ago, dropping 5.98 percent from the first quarter of 2011 to the second quarter.

“While relatively low home prices and high unemployment continue to exert upward pressure on delinquency rates, they are more than offset by the impact of more conservative lending policies reflecting consumers with higher credit scores,” said Tim Martin, group vice president of the U.S. Housing Market in TransUnion’s financial services business unit. “Not only are these consumers less likely to default if house prices continue to edge downward throughout the year, but their willingness to repay their debt obligations in the face of high unemployment rates is greater. It is because of these dynamics that lenders today take a much closer look at the borrower’s income history and overall debt situation than before the recession began in 2007.”
Vermont was the only state to post an increased mortgage delinquency rate from the first quarter to the second quarter.

Seventy-nine percent of the metropolitan statistical areas (MSAs) posted a decline in their mortgage delinquency rates, up from 68 percent in the first quarter and a vast improvement from the fourth quarter of 2010 when only 44 percent of the MSAs posted declines in their mortgage delinquency rates.

The four states that posted the highest mortgage delinquency rates in the second quarter of 2011 were Florida (13.91%), Nevada (13.04%), California (7.83%), and Arizona (7.78%).

The four states that posted the lowest mortgage delinquency rates in the second quarter were North Dakota (1.45%), South Dakota (2.31%), Nebraska (2.43%), and Alaska (2.64%).

TransUnion forecasts a continuing downward trend in delinquency rates for the remainder of 2011 as economic conditions improve and improved loan performance through tighter lending standards offset the impact of falling home prices.

Tags: TransUnion, mortgage delinquency rate, improvement, low home prices, high unemployment, improved loan performance, tighter lending standards