TranUnion: Mortgage delinquencies fall nearly 17%

Shrinking foreclosure pipelines drive yearly improvement

Mortgage delinquencies continued their downward trend and fell to 3.36% at the end of the third quarter 2014, decreasing nearly 17% in the last year, according TransUnion’s latest mortgage report.

This is the eleventh consecutive quarter of declines thanks to a continuing clearance of the foreclosure backlog and a steady rise in home values.

“While mortgage delinquency rates remain elevated relative to historic norms, they are steadily improving,” said Joe Mellman, vice president in TransUnion’s financial services business unit.

“New mortgage cohorts over the past several years have been squeaky clean from a risk perspective. This fact, combined with the continuing clearance of the foreclosure backlog and the gradual but steady rise in home values, serves to drive the ongoing trend toward lower mortgage delinquency rates overall,” Mellman continued.

Broken up, the nation’s largest markets recorded some of the biggest mortgage delinquency rate declines. Between third quarter 2013 and third quarter 2014, Miami (-31.6%), San Francisco (-28.6), Phoenix (-27.1%) and Los Angeles (-24.2%) continued to experience major improvements in delinquency.

Only two of the largest markets did not have double digit declines: New York (-9.9%) and Philadelphia (-9.4%).

“It’s especially heartening to see major declines in areas that were hardest hit by the mortgage crisis,” continued Mellman. “In part, it speaks to the broader rebound in the economy. As unemployment continues its decline and home values improve, consumers have both greater wherewithal and motivation to stay current on their housing payments.”

For example, the mortgage delinquency rates for Los Angeles (2.53%) and Phoenix (2.47%) are now nearly one full percentage point below the national average of 3.36%. In comparison, for much of 2009 and 2010, these areas had delinquency rates that exceeded 10%, whereas the national average never breached the 7% mark.

On a quarterly basis, all 50 states and the District of Columbia experienced declines in their mortgage delinquency rates between third quarter 2013 and third quarter 2014, with Nevada (-29.0%), Florida (-28.8%) and California (-26.5%) witnessing the biggest declines. 

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please