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Late mortgage payments halt rise

NEW YORK — The rate at which U.S. homeowners fell behind on their mortgage payments remained stubbornly elevated in the second quarter.

In the three months ended June 30, 6.67 percent of mortgage holders were 60 days or more behind on their payments, credit reporting agency Trans­Union said Tuesday. That's a big jump from 5.81 percent in the second quarter of last year, and well above the historical norm of 1.5 to 2 percent.

Driving up the national rate are the four states hardest hit by the foreclosure crisis: Florida, Nevada, Arizona and California. In each of those, the rate is above 10 percent, with Nevada leading at 15.86 percent, compared with 13.8 percent a year ago. In Florida, the delinquency rate rose to 15 percent, from 12.3 percent last year.

North and South Dakota remain at the low end for the nation, at 1.61 percent and 2.23 percent, respectively.

One positive sign is that the statistics mark a marginal improvement from the rate of 6.77 percent recorded during the first three months of the year. It's also below the 6.89 percent record reached in the fourth quarter of 2009.

"We're seeing signs of recovering in terms of delinquency," said F.J. Guarrera, vice president in TransUnion's financial services unit.

TransUnion uses a 60-day delinquency rate as a warning sign of potential foreclosure. That's because it would be difficult for homeowners having financial problems to make up two payments to bring their account current.

The data come days after foreclosure listing firm Realty­Trac Inc. said the number of U.S. homes lost to foreclosure in July surged 6 percent from last year. That jump indicates that more banks stepped up repossessions to clear out their backlog of bad loans.

"A lot of foreclosures continue to work their way through the system," Guarrera said. Although the delinquency data do look back a few months, the figures show a slight improvement that could indicate foreclosures will start to slow, he said.

There were 12 states that showed increased delinquency rates in the second quarter, whereas a year ago the figure worsened in nearly every state, Guarrera said.

The figures point toward a very slow recovery. TransUnion expects the delinquency rate to drift down for the rest of the year, nearing 6.4 percent nationally by the end of 2010.

Worst-off states

TransUnion's forecast for states facing the worst mortgage delinquency and foreclosure prospects:

>> Florida: The delinquency rate could hit 16.2 percent by year end, but TransUnion expects late payments to start declining in 2011.

>> Arizona: The delinquency rate will likely hover between 9.5 and 10 percent for the next several quarters, and is forecast to start dipping in mid 2011.

>> California: The worst may be behind it. TransUnion expects the delinquency rate to stay close to its current level through 2010 and then show a steady decrease.

>> Georgia: There are signs of further trouble. The state now has the fifth-highest delinquency rate at 7.69 percent.

>> Nevada: The rate is expected to start falling by the end of this year, but remain above 10 percent through 2012.

Late mortgage payments halt rise 08/17/10 [Last modified: Tuesday, August 17, 2010 8:18pm]
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