TransUnion’s quarterly analysis of trends in the mortgage industry found that mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased for the 12th straight quarter, hitting an all-time national average high of 6.89 percent for the fourth quarter of 2009. This quarter marks the first time the mortgage delinquency rate increase did not decelerate after doing so for three consecutive periods according to an article in Transunion here.
This statistic, which is traditionally seen as a precursor to foreclosure, increased 10.24 percent from the previous quarter’s 6.25 percent average. Year-over-year, mortgage borrower delinquency is up approximately 50 percent (from 4.58 percent).
Mortgage borrower delinquency rates in the fourth quarter of 2009 continued to be highest in Nevada (16.19 percent) and Florida (14.93 percent), while the lowest mortgage delinquency rates continued to be found in North Dakota (1.84 percent), South Dakota (2.46 percent) and Alaska (2.84 percent). Interestingly, areas showing the largest percentage drop in average mortgage debt were Alaska (-3.5 percent), South Dakota (-1.58 percent) and Nevada (-1.26 percent).
While Nevada had the highest default rate in the nation, it also had the largest average percentage drop in mortgage debt. As more uderwater Nevada homeowners default, brand new homeowners are taking on much less debt- and in many cases buying all cash.
The average national mortgage debt per borrower increased (0.29 percent) to $193,690 from the previous quarter’s $193,121. On a year-over-year basis, the fourth quarter 2009 average represents a 0.47 percent increase over the fourth quarter 2008 average mortgage debt per borrower level of $192,789, which further suggests stabilization in housing prices, traditionally seen as a key ingredient for a sustained economic recovery.
The continuing rise in foreclosures, in conjunction with low consumer confidence in the housing market, continues to hinder housing value appreciation and impede recovery in the mortgage industry. Furthermore, there is wave of adjustable rate mortgages (ARMs) that have yet to reset. Many of these are Option and Alt-A loans. When the interest rates on these loans reset many consumers potentially will not be able to meet their debt obligations.
“With regard to regional forecasts, Nevada is still anticipated to experience the highest mortgage delinquency rate by mid-2010, reaching as high as one in five mortgage borrowers.”