Mortgage Delinquencies to Rise 33 Percent This Year

Mortgage delinquencies could rise 33 percent this year as the economy continues its poor performance and housing sales remain weak, according to the Trend Data database from consumer information firm TransUnion. In contrast, average mortgage debt is dropping as home prices decline and fewer consumers buy a new home, TransUnion reports.

TransUnion is projecting the national mortgage borrower 60-day delinquency rate will rise from 2.99 percent in the fourth quarter of 2007 to 4.0 percent by year-end 2008.

Nevada had the worst mortgage delinquency numbers in the fourth quarter of 2007, recording a 4.68 percent rate, followed by Florida with 4.49 percent. North Dakota had the lowest rate with 1.13 percent.
 
Meanwhile, the average mortgage debt per borrower nationally fell in last year’s fourth quarter 3.92 percent to $191,370. This drop could be seen as a positive except it is occurring due to a reduced demand for homes, according to Keith Carson, senior consultant in TransUnion’s financial services group.

“We are seeing a decrease in home values due to the over supply of homes in various areas of the country,” said Carson. “There are price reductions to meet that low demand.” Yesterday, Standard & Poor’s reported a composite of two of its housing price indices dropped more than 12.5 percent in February, the sixth month in a row the composites have declined.

The problems in the housing industry will continue this year as the subprime and Alt-A mortgages reset higher and more consumers have troubles paying the mortgage, said Carson.

TransUnion’s Trend Data is a database of 27 million anonymous consumer records randomly sampled every quarter.