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Trepp: Slow Decline in Delinquencies Suggests Prolonged Recovery

Recording a slight decrease in delinquencies in its preliminary third quarter estimate, Trepp predicts full market recovery will not occur for years.

Residential mortgage delinquencies fell 0.3 percent in the third quarter to 12 percent, according to Trepp's preliminary data. This is down 1.1 percent from last year.

Serious delinquencies in residential mortgages also declined in the third quarter to 5 percent.

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""The slow rate of improvement reflects the high volume of foreclosures and weak price trends that still plague the market,"" Trepp states in its preliminary report.

Commercial delinquencies also fell by 0.3 percent in the third quarter - falling from 4.9 percent to 4.6 percent.

""The improvement during the third quarter is more modest than in the second quarter, suggesting that lenders' efforts to shed nonperforming assets slowed in response to the weaker economy in the third quarter,"" Trepp states.

Construction loan and commercial and industrial loan delinquencies fell during the third quarter.

Construction loan delinquencies, as estimated by Trepp's preliminary data, stood at 15.6 percent for the quarter.

Commercial and industrial loan delinquencies fell from 2.2 percent to 1.9 percent in the third quarter. This is the first time the rate has fallen below 2 percent since the end of 2008.

Final third-quarter data will be available toward the end of the month. Trepp's early estimates are based on earnings reports and call reports from several smaller banks.

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