Delinquency Grows, But More Slowly

Posted by Orb Staff on June 01, 2009 No Comments
Categories : Mortgage Servicing

ge loan delinquency increased for the ninth straight quarter, but at a slower pace, according to TransUnion's latest analysis of the mortgage market. The delinquency rate hit a national average of 5.22% for the first quarter of 2009, which is up almost 14% from the previous quarter's 4.58% average. This compares to a 16% increase from the third to fourth quarter of 2008. Year-over-year, mortgage loan delinquency is up approximately 62%, the company says. Mortgage borrower delinquency rates in the first quarter of 2009 were highest in Nevada (11.61%) and Florida (11.01%), while the lowest mortgage delinquency rates were found in North Dakota (1.51%), South Dakota (1.94%) and Alaska (2.14%). The three areas showing the greatest percentage growth in delinquency from the previous quarter were Hawaii (+34.4%), Oregon (+30.7%) and Nevada (+28.9%). The delinquency rate climbs at an average quarterly pace that almost doubles that of the 2001 recession, notes Keith Carson, a senior consultant in TransUnion's financial services group. The first quarter's results still offer "a glimmer of hope and a chance for optimism," he contends. "For the first time since the recession began at the end of 2007, the quarterly growth rate for national mortgage delinquency decreased," Carson says. "On a state basis, for example, Florida's quarterly growth rate for mortgage delinquency went down, from 22 percent in the fourth quarter of 2008 to almost 16 percent in the first quarter of this year. While this may sound like trying to make good news out of bad, in fact, it is an indication that we may be currently working our way through the worst of the recession.’ The average national mortgage debt per borrower rose again (1.41%) to $195,500, from the previous quarter's $192,789. On a year-over-year basis, the first-quarter 2009 average represents a 1.87% increase compared to the first-quarter 2008 average of $191,917. The area with the highest average mortgage debt per borrower was still California, at $365,192, followed by the District of Columbia, at $360,217 and Hawaii, at $314,269. The lowest average mortgage debt per borrower was in West Virginia, at $97,187. High unemployment rates and deflated housing prices will cause mortgage delinquency rates to reach 7% by the end of the year, according to TransUnion's projections. "At this juncture, it is difficult to predict with any certainty what impact, if any, the various government initiatives will have on the mortgage delinquency," Carson adds. SOURCE: Tra

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