Delinquency Rate Reaches Lowest Level Since 2009: TransUnion

05/09/2012 By: Esther Cho 

After declining during the 2012 first quarter, the national mortgage delinquency rate is at its lowest level since the first quarter of 2009 and finally dropped after two consecutive quarterly increases. TransUnion reported Wednesday that the national delinquency rate, which includes borrowers 60 or more days past due, is 5.78 percent for the first quarter of 2012, a quarterly and yearly drop when the rates were 6.01 percent and 6.19 percent, respectively.

“To see that quarter over quarter, and year over year, more homeowners were able to make their mortgage payments is certainly welcome news,” said Tim Martin, group VP of U.S. Housing in TransUnion’s financial services business unit.
Martin also added that while we are still about three-times above the pre-recession norm, we should begin to see consistent improvements each quarter.
As for individual states, Florida (13.87 percent) took the lead for the highest delinquency rate, followed by hard-hit state Nevada (11.16 percent), then New Jersey (8.31 percent) and Maryland (7.11 percent).

States with the lowest delinquency rates were North Dakota (1.51 percent), South Dakota (2.11 percent), Nebraska (2.31 percent), and Wyoming (2.43 percent).
The three states that saw the greatest year-over-year increases in their rates were Vermont, which saw its rate go up by about 15 percent to 3.31 percent, followed by New Jersey and Arkansas, which saw smaller declines under 10 percent.
The three states that saw the greatest yearly declines in their mortgage delinquency rate were Arizona, which dropped its rate by about 25 percent to 6.86 percent, followed by Wyoming, which had a 23 percent reduction to 2.43 percent, and California, which fell to 6.66 percent after cutting its rate by 22 percent.
For metropolitan areas, 73 percent saw decreases in their mortgage rates in the first quarter of 2012 compared to the previous two quarters, when only 36 percent of metro areas saw a drop in their delinquency rate.
TransUnion predicts this will be a continuing trend and expects mortgage delinquency rates to fall further downward in 2012.
“We have seen increased traction of refinance activity related to HARP 2.0, a program that makes it easier for homeowners with negative equity in their home to refinance,” said Martin. “Going forward, as these homeowners take advantage of the historic low mortgage interest rates, and perhaps lower their monthly payment in the process, it may have some positive impact on the overall delinquency rate starting later this year.”
TransUnion’s forecast is based on various economic assumptions and is subject to change if there are unanticipated shocks to the economy.