About 2.5 percent of current mortgage balances in the U.S. transitioned into delinquency during the third quarter, according to a new report issued by the ""Federal Reserve Bank of New York"":http://www.newyorkfed.org Monday.
[IMAGE]That assessment reverses a recent trend of reductions in the measure of newly delinquent mortgage balances. Prior to the rise in the most recent quarter, the Federal Reserve had recorded declines in the percentage of current mortgages falling behind on payments going back to the third quarter of 2010.
The rate of transition from early (30-60 days) into serious (90 days or more) delinquency also rose slightly, with 31.3 percent of early stage delinquencies moving into the seriously delinquent bucket during the third-quarter period.
The New York Fed says deterioration among delinquent mortgages was accompanied by a significantly lower cure rate, with the transition rate from early delinquency to
[COLUMN_BREAK]""current"" decreasing over 4 percentage points in the quarter.
About 264,000 individuals had a foreclosure notation added to their credit reports between June 30 and September 30 â€" a 7 percent decrease when compared to new foreclosures during the second quarter. New bankruptcies during the third quarter tallied 423,000, down on both a quarterly and annual basis.
Mortgage balances on consumer credit reports fell by approximately $114 billion or 1.3 percent over the third quarter while home equity lines of credit (HELOC) balances increased by roughly $14 billion or 2.3 percent.
Mortgage originations, which the Fed measures as appearances of new mortgages on consumer credit reports, fell for a second consecutive quarter to $292 billion. Mortgage originations in the third quarter of this year were 17 percent below the previous quarter’s level and 24.7 percent below a year ago.
At $292 billion, mortgage originations last quarter were at their lowest level since mid-2000.
Household mortgage and HELOC indebtedness are now 9.6 percent and 10.5 percent, respectively, below their peaks.
Consumer debt overall declined by approximately $60 billion to $11.66 trillion between the second and third quarters.
Andrew Haughwout, VP in the research and statistics group at the New York Fed, says the decline in outstanding consumer debt reveals that households continue to try and deleverage in the wake of a challenging economic environment and large declines in home values.