Based on credit performance of 27m consumers, national credit bureau TransUnion projects mortgage delinquencies of 60 or more days to drop nearly 3% by year-end 2010 to 6.39%, from an expected 6.56% at year-end 2009. Recent years marked a series of "unprecedented" year-on-year increases, TransUnion said, with delinquencies rising in the the 11th straight quarter during Q309. "Tied directly to anticipated unemployment rates and housing values, the decrease in delinquencies should be gradual," said Ezra Becker, director of consulting and strategy in TransUnion's financial services group, in a statement. "We expect this change to be driven in part through the continued conservative approach lenders are taking to new loan underwriting, as many of the existing mortgages in the market work their way out of the system and off the books of lending institutions." The expected decline in delinquencies, though relatively slow across the US, will reach double digits in 22 states, with delinquency expected to decline 17.9% in North Dakota, 15% in Minnesota and 14.4% in Oklahoma. A few states are expected to see increases in delinquencies, including Florida (17.3%), Arizona (6.3%), California (0.93%), New York (0.43%) and Virginia (0.37%). TransUnion expects Florida to bear the highest delinquency rate of 16.9% at year-end 2010, while Nevada will follow closely at 16.1%. North Dakota is expected to finish next year with the lowest delinquency rate of 1.43%, while South Dakota and Nebraska will follow at 2.2% and 2.35%, respectively. Write to Diana Golobay.