Are We Making Our Payments?

A good recovery sign:  Mortgage delinquencies are plummeting.

Chicago business and consumer credit rating agency Transunion says that the mortgage delinquency rate  has dropped 23.3% in the past year--4.09% of all active mortgages at the end of the third quarter, down from 5.33% in the year earlier period.

The company defines its measure as the the rate of borrowers 60 days or more delinquent on their mortgage.

The rate also declined from this year’s second quarter--the seventh straight quarterly decline.

Transunion says that all 50 states and the District of Columbia saw delinquency rate declines over the one year period.  California, Arizona, Nevada, Colorado and Utah had declines of 30% or more their mortgage delinquency rate, while California, Florida and Nevada—states plagued with recession-high delinquency rates--had double-digit percentage drops in the last quarter.

TransUnion's quarterly Industry Insights Report is based on anonymized credit data from virtually every credit-active consumer in the United States,” the company says.

The “percentage of borrowers willing and able to make their mortgage payments continues to improve,” noted Tim Martin, group vice president of U.S Housing for TransUnion's financial services business unit, in a press release. “The overall delinquency rate is still high relative to 'normal,' but a 23% year over year improvement is great news for homeowners and their lenders."

The report says that new account originations increased to 2.34 million in 2013’s second quarter, , up from 2.09 million in the year-earlier period. “This is a major increase from just two years ago,” the report says, when there were 1.32 million second-quarter 2010 new account originations.

TransUnion forecasts that the delinquency rate “will likely be just under 4% at the end of the year.”

You can see TransUnion's full press release with additional data, here.

 

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