Home / News / Market Studies / TransUnion: Mortgage Delinquency Rates Rise for Seventh Straight Quarter
Print This Post Print This Post

TransUnion: Mortgage Delinquency Rates Rise for Seventh Straight Quarter

""TransUnion"":http://www.transunion.com, a global credit and information management company, released the results of its analysis of trends in the mortgage industry for the third quarter of 2008 on Monday. According to the company, mortgage loan delinquency (ratio of borrowers 60 or more days past due) increased for the seventh straight quarter, hitting a national average high of 3.96 percent. Typically a precursor to foreclosures, this statistic is up more than 12 percent from the second quarter's 3.53 percent average and up approximately 54 percent from the same period last year, TransUnion said.
According to TransUnion's state figures, mortgage borrower delinquency rates in the third quarter were highest in Florida (7.82 percent) and Nevada (7.71 percent), while the lowest delinquency rates were found in North Dakota (1.35 percent), South Dakota (1.6 percent), and Montana (1.71 percent).
The three areas showing the greatest percentage growth in delinquency from the previous quarter were the District of Columbia (42.7 percent), North Dakota (22.7 percent), and Idaho (21.7 percent). Only West Virginia (-0.39 percent) experienced a drop in borrower delinquency ratio over the previous quarter.
""As expected, the mortgage sector continued to experience increases in the delinquency rate due to worsening economic conditions in both the labor and financial markets,"" said Keith Carson, a senior consultant in TransUnion's financial services group.
""The third quarter of 2008 showed not only an increase in the nation's unemployment rate and declines in both home prices and per capita disposable income, but also a deeper slide in consumer confidence,"" continued Carson. ""Combined with the reluctance of lending institutions to extend credit except to the most credit worthy consumers, many current home owners may find their repayment options limited in a rapidly deteriorating economic environment.""
The Mortgage Bankers Association (MBA) also showed a steady increase in delinquency rates in a report it released ""last Friday"":http://dsnews.comindex.php/home/news_story/2259, although the association's figures came in significantly higher than TransUnion's. According to the MBA, the delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 6.99 percent of all loans outstanding at the end of the third quarter of 2008, the highest recorded in the history of the MBA survey.
Carson went on to explain that TransUnion's forecasting models predict the national 60-day mortgage delinquency rate will continue to rise in the fourth quarter of 2008 and throughout 2009, with the 2008 delinquency rates ending at 4.66 percent and 2009 rates possibly reaching 7 percent or greater.
""These numbers, which are more pessimistic than anticipated one quarter ago, are due to the significant weaknesses recently highlighted in the financial markets as the U.S. economy moves deeper into a recession,"" Carson said. ""However, depending on the severity of the capital markets crisis, the ultimate outcome of the decline in the U.S. auto industry and the timing of a recovery in retail sales, we see the possibility of a flattening of mortgage delinquencies as the economy begins to stabilize and some sectors of the country begin to improve in the second quarter of 2010.""
As far as state projections go, Florida (9.7 percent) is anticipated to experience the highest average delinquency rate by the end of 2008, while North Dakota (1.45 percent) is expected to show the lowest level of delinquency, TransUnion reported.
The source of the underlying data used for its analysis is TransUnion's Trend Data, a database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion's national consumer credit database. Today's mortgage delinquency report is part of an ongoing series of quarterly lending sector analyses focusing on credit card, auto loan, and mortgage data to be released on TransUnion's Web site.
TransUnion gathers, analyzes, and delivers credit-related information to help businesses improve efficiency, manage risk, reduce costs, and increase revenue, and to help consumers better manage their credit health to achieve their financial goals, the company explained in a press statement. Founded in 1968 and headquartered in Chicago, TransUnion employs more than 3,600 employees in more than 25 countries on five continents.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

Check Also

All-Cash Home Purchases Hit Highest Level Since 2014

In April, all-cash home purchases reached their highest level in nearly a decade. A new report from Redfin reveals elevated mortgage rates driving down overall home sales more than all-cash sales.