TransUnion’s Quarterly Analysis of Trends in the mortgage industry found that mortgage loan delinquency rate  decreased nationally again in the second quarter of 2010.

New data from TransUnion suggests that the credit conditions in the housing sector have now begun to stabilize. However, the mortgage loan delinquency rate (the ratio of borrowers 60 or more days past due) only dropped to 6.67 percent — a level marginally lower than in the first quarter’s 6.77 percent national average.

This statistic, traditionally seen as a precursor to foreclosure, reflects a decrease of 1.48 percent from the previous quarter’s 6.77 percent national average. The year over year, mortgage borrower delinquency is still up approximately 14.8 percent (from 5.81 percent in the second quarter 2009).

Highlights

• Mortgage borrower delinquency rates in the second quarter of 2010 continued to be highest in Nevada (15.86 percent) and Florida (15.02 percent),
• The lowest mortgage delinquency rates continued to be found in North Dakota (1.61 percent), South Dakota (2.23 percent) and Nebraska (2.61 percent).
• Twelve states showed increases in delinquency from the previous quarter with Rhode Island (+4.63 percent), New Mexico (+4.45 percent) and Washington (+3.39 percent) leading the pack.
• Florida is again anticipated to experience the highest mortgage delinquency rate by the end of 2010, reaching as high as 16.2 percent.
• North Dakota is expected to continue to exhibit the lowest mortgage delinquency by year-end with a rate of 1.5 percent.

“The second quarter decline in mortgage delinquency gives further credence to the notion that the credit market is stabilizing. Although this is good news for the consumer, the economy is still burdened by high unemployment, upcoming ARM resets and a glut of foreclosures,” said FJ Guarrera, vice president in TransUnion’s financial services business unit.

“The dynamics inside the mortgage market are changing. It is ironic that, with record-setting low interest rates, a large inventory of homes and low home prices, this is one of the most affordable times to buy a house within the last 50 years — yet most consumers are not considering a home purchase the investment opportunity it was considered in the past. Add to that irony and concurrent with this near perfect consumer buying conditions, tighter lending standards and increased documentation scrutiny has made it difficult for many consumers to qualify for a mortgage.”

TransUnion  Mortgage Delinquency Rate Forecast

“TransUnion believes that the 60-day mortgage delinquency rate will likely continue to drift downward in 2010, possibly nearing 6.4 percent nationally by the end of the year. Note that this forecast is based on various economic assumptions, including the assumption that both real estate values and the unemployment picture will improve gradually. This forecast would certainly change if there are unanticipated shocks to the economy affecting the recovery in the housing market,” said Guarrera.

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Press Release – TransUnion’s Quarterly Analysis of Trends – Q2, 2010

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