National 60+ day delinquencies will drop nearly 3% by the end of 2010 to 6.39% from an expected 6.56% at the conclusion of 2009, according to TransUnion's annual credit forecasts.
The projected decrease in mortgage delinquencies would end a trend that included unprecedented year-over-year increases of 54% between 2006 and 2007, 53% between 2007 and 2008, and 43% between 2008 and 2009.
‘We believe the nation will see a turnaround in mortgage delinquencies in the coming year,’ says Ezra Becker, director of consulting and strategy in TransUnion's financial services group. ‘Tied directly to anticipated unemployment rates and housing values, the decrease in delinquencies should be gradualâ�¦. We expect this change to be driven in part through the continued conservative approach lenders are taking to new loan underwriting, as many of the existing mortgages in the market work their way out of the system and off the books of lending institutions.’
Though the projected rate of decrease in mortgage delinquencies will be relatively slow for a majority of the nation, 22 states are expected to experience double-digit decreases in delinquencies as housing values in those states are forecasted to improve. The states with the greatest decrease in mortgage delinquencies are expected to be North Dakota (-17.93%), Minnesota (-15%) and Oklahoma (-14.42%). Five states are expected to see increases in mortgage delinquencies, including Florida (17.34% increase), Arizona (6.26%), California (0.93%), New York (0.43%) and Virginia (0.37%).
Florida is expected to have the highest mortgage delinquency rate by the end of next year at 16.86%, followed closely by Nevada at 16.14%. North Dakota (1.43%), South Dakota (2.2%) and Nebraska (2.35%) should have the lowest delinquency rates.