Mortgage debt dominates consumer balance sheets

Mortgage debt continues to make up the largest portion of the $11.34 trillion consumer debt, according to the household debt and credit report by the Federal Reserve Bank of New York.

Of the overall consumer debt, mortgage takes precedence at $8.03 trillion. However, even though mortgage leads, mortgage debt remained roughly unchanged from year-over-year in the third quarter of 2012.

Home equity lines of credit (HELOC) were the only area of mortgage debt that showed a significant decline in credit, reporting a $10 billion balance drop to $563 billion. This can be attributed to the unusually high charge-offs of delinquent HELOCs this quarter.

Delinquency rates, overall, continued improving in the fourth quarter of 2012, sinking to 8.6% from 8.9% in the third quarter of 2012.

Moreover, delinquency transition rates for mortgage accounts stayed stable through 2012, so only 1.8% transitioned into delinquency in the fourth quarter of 2012.   

Also holding steady, the rate at which loans late for 30 to 60 days transitioned into serious delinquencies. Loans in that category made up 26.1% of the studied pool. The cure rate, the share of balances that transitioned from 30 to 60 days delinquent to current, reported slight improvement in the fourth quarter, rising 28.1%.

Overall, the progression of the mortgage delinquency has improved in the fourth quarter of 2012, with 5.6% of mortgage balances in serious delinquency, opposed to 5.9% in the previous quarter.

Originations, the appearances of new mortgage balances in consumer credit reports, have increased ever since bottoming out in the third quarter of 2011, reaching $553 billion this quarter.

About 210,000 individuals had a new foreclosure notation added to their credit report between Sept. 30 and Dec. 31, 2012.

Breaking into individual states, Nevada ranks the highest in percent of mortgages that are 90 or more days past due along with consumers with new foreclosures, hitting about 17% and just below .2%. Florida was second in mortgage debt 90+ days late at about 13%, and Arizona was second in consumers with new foreclosures directly below Nevada.  




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