Mortgage Delinquencies Up - But Rate of Increase Slowing

TransUnion has just reported that delinquent mortgages increased to 6.25%, up a whopping 58% from 3.96% a year ago.  These are mortgages 60 or more days past due.  Two months delinquency is a serious step toward foreclosure, as it then becomes more difficult for homeowners to catch up on back payments.  HOWEVER, the rate of delinquency is slowing.  The rate was up 7.6% from the second quarter — a much smaller jump than the 11.3% rise in the second quarter and a 14% rise seen in the quarter before that.  F.J. Guarrera, vice president of TransUnion’s financial services division, says that while the slower rate is encouraging, the continual increase shows there are still a lot of problematic mortgages out there. 

Mortgage delinquencies remain highest in the four states: in Nevada, the rate reached 14.5%, up from 7.7% a year ago; in Florida, the rate was 13.3%, up from 7.8% last year; in Arizona, the rate hit 10.4%, up from 5.5% in 2008; and in California, the rate jumped to 10.2%, from 5.8% last year.  Two things have to get better before mortgage delinquency rates start reversing themselves: home values and unemployment. “Until we see improvement in both of those areas, it’s possible that it will take longer for delinquency to improve,” Guarrera said.

These numbers help reinforce that opportunities will continue to be available in the Short Sale and REO businesses for the savy investor.

To your success,

Ted Akers

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