Report: Mortgage Delinquencies Rise for 8th Straight Quarter

According to a report released Tuesday by credit reporting agency ""TransUnion LLC"":http://www.transunion.com, the ratio of borrowers 60 or more days past due on their mortgages increased for the eighth straight quarter, hitting a national average high of 4.58 percent for the fourth quarter of 2008.
Traditionally seen as a precursor to foreclosures, this statistic is up almost 16 percent from the previous quarter's 3.96 percent average, and up approximately 53 percent from the same period last year when the ratio was 2.99 percent.
Based on TransUnion's data, which is accumulated from 27 million individual credit files of U.S. consumers, Florida took the honor of the state with the most mortgage delinquencies, at 9.52 percent. The Sunshine State was followed by Nevada (9.01 percent), Arizona (6.93 percent), and California (6.88 percent).
North Dakota had the lowest delinquency rate at 1.21 percent. Alaska (1.74 percent) and South Dakota (1.97 percent) rounded out the bottom three. North Dakota and Alaska both showed a decline in mortgage delinquency rates, down respectively from the previous quarter's 10 percent and 19 percent.
Looking at TransUnion's data, the average national mortgage debt per borrower rose slightly (0.26 percent) to $192,789, from $192,287 the previous quarter. That figure represents a year-over-year increase of 0.74 percent, compared to $191,370 in the fourth quarter of 2007.
California had the highest average mortgage debt per borrower at $356,421, followed by the District of Columbia at $354,082 and Hawaii at $310,289. West Virginia had the lowest at $96,243.
According to TransUnion, the dramatic rise in the mortgage delinquency rates since the end of 2007 (the official beginning of the current recession) highlights a worthwhile comparison to the last U.S. recession. The 2001 recession, beginning in March of 2001 and ending in November of the same year, resulted from a collapse in the dot com bubble combined with the terrorist attacks of September 11th. During that time, the mortgage delinquency ratio increased by almost 28 percent.
While considered a large increase at the time, in comparison to the delinquency impact of the current recession it might be viewed as modest, TransUnion says. This time around the national average mortgage delinquency rate has increased by almost 79 percent to date--essentially tripling what occurred in the last recession.
Keith Carson, a senior consultant in TransUnion's financial services group, said that the company's forecasts show the 2009 mortgage delinquency rates reaching as high as 8 percent or more by year end. ""Economic factors will continue to have a significant impact on the credit markets as unemployment increases and housing prices continue to erode,"" Carson said. ""However, if government efforts to reduce mortgage rates are successful, there could be a gradual increase in home purchases, moving toward a stabilization of housing prices and a decrease in mortgage loan delinquencies in 2010.""
As far as state projections go, TransUnion expects Florida to continue to record the highest delinquency rate through the end of 2009, with the possibility of doubling its current nonpayment rate of 9.5 percent. North Dakota is expected to continue to exhibit the lowest mortgage delinquency rate, TransUnion said, reaching just over 1.5 percent by the end of 2009.