Mortgage loan delinquencies have largest quarterly decline in four years

Dennis Norman St LouisOn the heels of the post I just did on shadow inventory, it is good to see a positive report on mortgage delinquencies! According to a report issued by TransUnion, mortgage loan delinquencies in the third quarter of this year declined 3.45 percent to 6.44 percent, marking the largest quarterly decline since the fourth quarter of 2006.

This statistic, which is traditionally seen as a precursor to foreclosure, reflects a decrease of 3.45 percent from the previous quarter’s 6.67 percent national average. Year over year, mortgage borrower delinquency is still up approximately 3.04 percent (from 6.25 percent in the third quarter 2009).

Mortgage Delinquency Statistics from the report for third quarter:

  • Mortgage borrower delinquency rates in the third quarter of 2010 continued to be highest in Nevada (15.12 percent) and Florida (14.63 percent), while the lowest mortgage delinquency rates continued to be found in North Dakota (1.52 percent), South Dakota (2.24 percent) and Nebraska (2.61 percent).
  • Ten states showed increases in delinquency from the previous quarter, with Maine (+4.71 percent), Kansas (+3.19 percent) and West Virginia (+3.12 percent) leading the pack.
  • Measures of later-stage mortgage delinquency, such as the ratio of borrowers 90 or 120 or more days past due, provide further positive news, as both showed larger decreases than in any quarter this year.
  • The average national mortgage debt per borrower again decreased (0.58 percent) to $190,176 from the previous quarter’s $191,284. On a year-over-year basis, the third quarter 2010 average represents a 1.52 percent decrease over the third quarter 2009 average mortgage debt per borrower level of $193,121.
  • The area with the highest average mortgage debt per borrower continued to be the District of Columbia at $368,255, followed by California at $342,695 and Hawaii at $309,536. The lowest average mortgage debt per borrower remained in West Virginia at $100,263.
  • Quarter over quarter, West Virginia showed the greatest percentage increase in mortgage debt (+1.06 percent), followed by Wyoming (+0.80 percent) and Rhode Island (+0.78 percent). Areas showing the largest percentage drop in average mortgage debt were New Mexico (-1.84 percent), Mississippi (-1.51 percent) and Florida (-1.44 percent).
  • On a year-over-year basis at a national level, mortgage originations dropped 23 percent. The drop was across all states, with the smallest decline in year-over-year originations seen in Utah (-6.43 percent) and Ohio (-8.93 percent). District of Columbia and Idaho experienced the steepest year-over-year declines (-40.7 percent and -39.5 percent, respectively).
  • Just as mortgage delinquency trends differ between the national and state economies, metropolitan areas also showed different movements in the third quarter of this year. Fifty-eight percent of the metropolitan statistical areas (MSAs) showed a decrease in their 60-day mortgage delinquency rates since last quarter, as compared to a 65 percent for the 90 and 120-day mortgage delinquency rates.

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