Mortgage Delinquencies Jump Over 10 Percent

Dennis Norman

Deceleration in Rise of Mortgage Delinquencies Short Lived

Back in July, 2009 when speaking in North Carolina President Barack Obama announced “we may be seeing the beginning of the end of the recession“. My thoughts then were that was very optimistic and I didn’t agree (for whatever that is worth). Since then some economists have announced the recession is officially over. Technically based upon a few bits of data the recession may be over, but for us real people that are actually living and functioning in this economy I don’t think it is over; at least not for the one market I know best, the housing market.

TransUnion LogoToday, TransUnion had more sobering news for the real estate market; the mortgage loan delinquency rate (the ratio of borrowers 60 or more days past due) increased for the 12th straight quarter, hitting an all-time national average high of 6.89 percent for the fourth quarter of 2009. The fourth quarter marks the first time the mortgage delinquency rate increase did not decelaerate after doing so in the three prior quarters.

Highlights from the fourth quarter report:

  • Mortgage delinquency rates continued to be highest in Nevada (16.19 percent) and Florida (14.93 percent)
  • Mortgage delinquency rates were lowest in North Dakota (1.84 percent), South Dakota (2.46 percent) and Alaska (2.84 percent)
  • Areas with the greatest growth in delinquency rates from the previous quarter were the District of Columbia (+20.2 percent), Louisiana (+17.7 percent) and Delaware (+14.8 percent).
  • No state showed in a decrease in mortgage delinquency rates from third quarter.
  • Average national mortgage debt per borrower increased (0.29 percent) to $193,690 from $193,121 in 3rd quarter.
  • The area with the highest average mortgage debt per borrower was the District of Columbia at $372,869, followed by California at $352,688 and Hawaii at $317,599.
  • The lowest average mortgage debt per borrower was in West Virginia at $99,028.

The Forecast for 2010 is not pretty

TransUnion is forecasting the 60-day mortgage delinquency rate to “peak between 7.5 and 8 percent over the course of 2010.” So we could be looking at an increase of anywhere from 8.8 percent to 16 percent in mortgage delinquencies from the record level they hit in the 4th quarter of 2009.

Ugh…I’m glad the recession is over, think how bad it would be if it wasn’t.

60 day mortgage delinquency chart

Source: TransUnion

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