Mortgage Loan Delinquencies on track to set record in 2009

Dennis Norman
Dennis Norman

TransUnion released the results of its analysis of trends in the mortgage industry for the third quarter of 2009 and the associated impact on the U.S. consumer.

Part of this report focused on delinquencies on mortgages and the rate of mortgage delinquency. The report showed that mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased for the eleventh straight quarter, hitting an all-time national average high of 6.25 percent for the third quarter of 2009, a 7.57 percent increase from the record-setting second quarter rate.

Traditionally mortgage delinquencies are seen as a precursor to foreclosures, the number of which has already set records several months this year, so this is an indication we still have a ways to go before we see the foreclosure rate return to something more normal.

Mortgage borrower delinquency rates in the third quarter of 2009 continued to be highest in Nevada (14.5 percent) and Florida (13.3 percent), while the lowest mortgage delinquency rates were found in North Dakota (1.7 percent), South Dakota (2.3 percent) and Vermont (2.6 percent). The three areas showing the greatest percentage growth in delinquency from the previous quarter were Wyoming (+17.9 percent), Kansas (+17.4 percent) and North Dakota (+16.0 percent ).

The average national mortgage debt per borrower decreased again in 3rd quarter, down 0.36 percent from the quarter before to $193, 121. The area with the highest average mortgage debt per borrower was again the District of Columbia at $359,788, followed by California at $354,510 and Hawaii at $312,844. The lowest average mortgage debt per borrower was once again West Virginia at $97,265.

Even though the rate of increase in mortgage delinquencies is slowing, it still appears 2009 is going to set a record. This, along with record foreclosures, unemployment of over 10 percent as well as the other challenges our economy is facing really makes me scratch my head when I see reports that the housing market is in recovery mode.

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