Delinquency Levels Down in Q4, but Still Not at Historical Levels

Real estate debt and delinquencies are on a continuing decline, according to the ""Federal Reserve Bank"":http://www.federalreserve.gov/ of New York's 2011 fourth quarter report on household debt and credit.

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Mortgage and home equity lines of credit (HELOC) balances fell at a combined $146 billion, with $134 billion from mortgages and $12 billion from HELOC, which are, respectively, 11 percent and 11.7 percent below their peaks.

Total household delinquency rates fell in the fourth quarter, with 9.8 percent of debt in some stage of delinquency as of December 31, 2011, compared to 10 percent on September 30.

The percentage of current mortgages that transitioned into delinquency and the percentage of mortgages that that went from being a 30-60 day account to becoming 90 days or more delinquent fell this quarter, with 2.2 percent of current

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mortgages becoming delinquent and about 28.8 percent of mortgages transitioning into serious delinquency.

The level of cure rates also improved, with 27.2 percent of mortgages in the 30-60 day range becoming current during the fourth quarter.

Despite this downward trend with delinquency, the numbers are still high compared to historical levels, according to the report.

""While we continue to see improvements in the delinquent balances and delinquency transition rates this quarter, there has been a noticeable decrease in the rate of improvement compared to 2009-2010,"" said Andrew Haughwout, VP and economist at the New York Fed. ""Overall, it appears that delinquency rates are stabilizing at levels that remain significantly higher than pre-crisis levels.""

The number of those who received a foreclosure note on their credit report, which was at about 289,000, increased this quarter by 9.5 percent compared to the previous quarter. The figure is still a 35.3 percent decrease compared to last year during the fourth quarter.
New bankruptcies, which stood at 425,000 during this fourth quarter, decreased by 14.9 percent compared to a year a ago.

Mortgage originations, which are measured as appearances of new mortgages on consumer credit reports, increased this quarter to $404 billion, but are still 13 percent below the level reached a year ago. For the year 2011, mortgage originations were $1.55 trillion, about 3.1 percent below what it was in 2010 and the lowest level since 2000.