Mortgage delinquency rate tumbles 3.5% in 3Q: TransUnion
The national mortgage delinquency rate fell 3.5% from the second to the third quarter to a rate of 6.44%, according to a report released Monday by TransUnion. This is the largest quarterly drop the firm witnessed since the fourth quarter of 2006. The rate still remains 3% higher than the third quarter of 2009, however. TransUnion said it expects this downward trend to continue. "TransUnion sees no reversal in the current three-quarter trend," said F.J. Guarrera, vice president of TransUnion's financial services business unit. "We believe that the 60-day mortgage delinquency rate will likely continue to drift downward for the remainder of the year, possibly nearing 6.2% nationally." Delinquency rates were highest in Nevada at 15.1%, followed by Florida at 14.6%. Delinquency rates were lowest in North Dakota (1.5%) and South Dakota (2.2%). Despite the national drop in delinquency rates, TransUnion reported that 10 states' rates increased during the third quarter. The states with the greatest increases were Maine, up 4.7% from the second quarter, followed by Kansas (up 3.2%) and West Virginia (up 3.1%). TransUnion said that measures of later-stage delinquencies (for example, the rate of mortgages that are 90-plus days delinquent) further indicate positive trends headed into the end of 2010 and the new year. The firm said serious delinquencies peaked in July 2009, the month after the recession officially ended. As of the third quarter, TransUnion's 90-day Real Estate Inquiry Index was 72.86, up 6.5% from the second quarter, but down 10.6% from the year ago period. The Real Estate Inquiry Index compares the number of credit reports requested of TransUnion for a real estate transaction during a specific quarter. A value greater or less than 100 indicates either positive or negative activity for that particular quarter compared to the benchmark year, which is 2000, the boom period proceeding the downturn initiated by Sept. 11, 2001. Although real estate credit activity is generally depressed around the nation, South Dakota and North Dakota have indices above 100, at 154.3 and 102.8, respectively. "South Dakota's relatively high real estate index is predominately associated with population growth and house price stability, while North Dakota's relatively high index is related to stable housing prices and low mortgage delinquency rates," the report said. The states with the lowest Real Estate Inquiry Indices were Alabama (12.8), Nevada (14.5) and Colorado (14.7) in the third quarter. TrasnUnion found that mortgage debt decreased 0.6% from the second to the third quarter of 2010, to an average of $190,176 per borrower. This is also down 1.5% compared to 2009 when the average debt per borrower was $193,121. Write to Christine Ricciardi.