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TransUnion: National Mortgage Loan Delinquencies Decline by the Largest Percent Since Recession Ended

CHICAGO, IL--(Marketwire - Aug 10, 2011) - The national mortgage delinquency rate (the rate of borrowers 60 or more days past due) decreased for the sixth consecutive quarter, dropping to 5.82% at the end of the second quarter in 2011. This information is reported by TransUnion and is part of its ongoing series of quarterly analyses of credit-active U.S. consumers and how they are managing credit related to mortgages, credit cards and auto loans.

Although mortgage delinquencies were expected to continue to drop, the Q2 2011 TransUnion data released today shows mortgage delinquency rates improved on a quarterly basis by 5.98%, more than any time since the recession officially ended two years ago.

"While relatively low home prices and high unemployment continue to exert upward pressure on delinquency rates, they are more than offset by the impact of more conservative lending policies reflecting consumers with higher credit scores," said Tim Martin, group vice president of the U.S. Housing Market in TransUnion's financial services business unit. "Not only are these consumers less likely to default if house prices continue to edge downward throughout the year, but their willingness to repay their debt obligations in the face of high unemployment rates is greater. It is because of these dynamics that lenders today take a much closer look at the borrower's income history and overall debt situation than before the recession began in 2007."

Between the first and second quarters of 2011, 49 states and the District of Columbia experienced declines in their mortgage delinquency rates with Vermont being the only state to experience an increase. On a more granular level, 79% of metropolitan areas saw declines in their mortgage delinquency rates in Q2 2011. This is an improvement compared to Q1 2011 when 68% of metropolitan statistical areas (MSA) experienced a decline their mortgage delinquency rates. In Q4 2010, only 44% of MSAs experienced such a decline.

TransUnion forecasts that mortgage borrower delinquency rates will continue to drift downward for the remainder of 2011, as economic conditions begin to slowly recover and tighter lending standards offset the impact of falling home prices.

"Mortgage delinquencies have shown six straight quarters of improvement and the pace of the improvement seems to be picking up speed. This is encouraging news. However, at their current level, nearly three times the pre-recession 'norm,' and the current pace of improvement, we may not see 'normal' delinquency rates until the end of 2015," said Martin.

TransUnion's forecast is based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates and real estate values. The forecast would change if there are unanticipated shocks to the economy affecting recovery in the housing market or if home prices fall more than expected.

Q2 2011 Mortgage Statistics - Delinquency Rates

Quarter over Quarter Q1 2011 Q2 2011 Pct. Change
USA 6.19% 5.82% (5.98%)

Year over year Q2 2010 Q2 2011 Pct. Change
USA 6.67% 5.82% (12.74%)

Highest Mortgage Delinquency States Q2 2011
Florida 13.91%
Nevada 13.04%
California 7.83%
Arizona 7.78%

Lowest Mortgage Delinquency States Q2 2011
North Dakota 1.45%
South Dakota 2.31%
Nebraska 2.43%
Alaska 2.64%

Top 3 Year-over-Year Increases Q2 2010 Q2 2011 Pct. Change
Maine 4.46% 4.69% 5.16%
South Dakota 2.23% 2.31% 3.59%
New Jersey 7.22% 7.43% 2.91%

Top 3 Year-over-Year Declines Q2 2010 Q2 2011 Pct. Change
Arizona 10.59% 7.78% (26.53%)
Utah 5.84% 4.36% (25.34%)
California 10.45% 7.83% (25.07%)

Q2 2011 Mortgage Statistics - Mortgage Debt Per Borrower

Quarter over Quarter Q1 2011 Q2 2011 Pct. Change
USA $190,115.00 $189,205.00 (0.48%)

Year over Year Q2 2010 Q2 2011 Pct. Change
USA $191,284.00 $189,205.00 (1.09%)

Highest Mortgage Debt States Q2 2011
District of Columbia $369,334.00
California $335,070.00
Hawaii $312,183.00
Maryland $249,237.00

Lowest Mortgage Debt States Q2 2011
West Virginia $102,807.00
Mississippi $108,011.00
Oklahoma $111,781.00
Arkansas $113,813.00

Top 3 Year-over-Year Increases Q2 2010 Q2 2011 Pct. Change
West Virginia $99,206.00 $102,807.00 3.63%
North Dakota $112,196.00 $115,461.00 2.91%
Vermont $140,069.00 $143,122.00 2.18%

Top 3 Year-over-Year Declines Q2 2010 Q2 2011 Pct. Change
Nevada $238,931.00 $224,100.00 (6.21%)
Florida $190,034.00 $181,524.00 (4.48%)
Arizona $207,815.00 $199,403.00 (4.05%)

Supporting Resources/Links

TransUnion Trend Data Interactive U.S. Map

TransUnion 1Q11 Mortgage Statistics

TransUnion Payment Hierarchy Study

TransUnion Deleveraging Analysis

TransUnion on Twitter

TransUnion's Trend Data database

TransUnion's Trend Data is a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion's national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels. For the purpose of this analysis, the term "credit card" refers to those issued by banks.

About TransUnion

As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion reaches businesses and consumers in 23 countries around the world. www.transunion.com/business