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TransUnion: National Mortgage Loan Delinquency Rate Drops Nearly 14% in 2012

CHICAGO, IL--(Marketwire - Feb 12, 2013) - The national mortgage delinquency rate (the rate of borrowers 60 or more days past due) declined for the fourth consecutive quarter, dropping from 5.41% in Q3 2012 to 5.19% in Q4 2012. On a year-over-year basis, the mortgage delinquency rate has declined nearly 14% from 6.01% in Q4 2011.

"The national mortgage delinquency rate experienced its largest yearly decline since the conclusion of the recession, though we still remain far above normal levels," said Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit. "For the most part, newer vintage mortgage loans are not the reason for the stubbornly high delinquency rate. They are performing relatively well. The elevated delinquency levels that we still are experiencing are a result of older vintage loans -- borrowers who haven't been making their payments for a rather long time that are still in the system, inflating the overall rate."

During the height of the mortgage crisis, mortgage delinquencies rose 54% in 2007, 53% in 2008 and 50% in 2009. The subsequent decline has been a slow process with delinquency levels dropping 7% in 2010, 6% in 2011 and now falling 14% in 2012.

Thirty-seven states and the District of Columbia experienced improvement in their mortgage delinquency rates from last quarter. Only three states did not experience mortgage delinquency improvement from last year.

At a more granular level, 81.4% of MSAs experienced a yearly decline in their mortgage delinquency rate. Notable MSAs experiencing declines included Los Angeles (-33.6%), Memphis (-32.2%), Philadelphia (-28.3%), Detroit (-27.2%) and Baltimore (-26.0%).

TransUnion expects the mortgage delinquency rate to continue its downward trend in the first quarter of 2013, though it will likely remain above 5%.

"The declines in the mortgage delinquency rate will likely be muted for the foreseeable future as the foreclosure process in some states can take more than 1,000 days," said Martin. "It's not clear yet, but recently announced regulatory rules related to mortgage servicing may tend to slow down this process further. What is clear from the data TransUnion collects, is that, until the old vintages work through the system, we expect the delinquency rate to remain elevated."

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.

TransUnion's forecast is based on various economic assumptions, such as gross state product, consumer sentiment, unemployment rates, real personal income, 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

Q4 2012 Mortgage Statistics - Delinquency Rates

Quarter over Quarter   Q3 2012   Q4 2012   Pct. Change 
USA   5.41%   5.19%   (4.07%)

Year over year   Q4 2011   Q4 2012   Pct. Change
USA   6.01%   5.19%   (13.64%)

Highest Mortgage Delinquency States Q4 2012
Florida 12.47%
Nevada 10.45%
New Jersey 7.72%
Maryland 6.88%

Lowest Mortgage Delinquency States Q4 2012
North Dakota 1.53%
South Dakota 1.97%
Nebraska 2.20%
Alaska 2.20%

Top 3 Year-over-Year Increases Q4 2011 Q4 2012 Pct. Change
Maine 4.93% 5.14% 4.26%
Arkansas 3.98% 4.10% 3.02%
North Dakota 1.50% 1.53% 2.00%

Top 3 Year-over-Year Declines  Q4 2011  Q4 2012 Pct. Change
Arizona 7.50% 5.18% (30.93%)
California 7.14% 5.03% (29.55%)
Utah 4.50% 3.56% (20.89%)

Q4 2012 Mortgage Statistics - Mortgage Debt Per Borrower

Quarter over Quarter  Q3 2012 Q4 2012 Pct. Change
USA $186,445 $186,785 0.18%

Year over Year Q4 2011 Q4 2012 Pct. Change
USA $188,194 $186,785 (0.75%)

Highest Mortgage Debt States  Q4 2012 
District of Columbia $375,353
California $324,867
Hawaii $315,721
Maryland $248,251

Lowest Mortgage Debt States  Q4 2012 
West Virginia $104,143
Mississippi $108,981
Oklahoma $113,757
Arkansas $114,639

Top 3 Year-over-Year Increases Q4 2011 Q4 2012 Pct. Change 
North Dakota $118,147 $125,549 6.26%
Alaska $199,539 $208,687 4.58%
Nebraska $124,292 $129,373 4.09%

Top 3 Year-over-Year Declines Q4 2011 Q4 2012 Pct. Change
Nevada $219,095 $207,416 (5.33%)
Arizona $197,319 $189,900 (3.76%)
Florida $181,241 $176,337 (2.71%)

Supporting Resources/Links

TransUnion Trend Data Interactive U.S. Map

TransUnion 3Q12 Mortgage Statistics

TransUnion Mortgage Loan Modification Study

TransUnion Payment Hierarchy Study

TransUnion Life After Foreclosure Study

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 credit and information 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 comprehensive data and advanced analytics and decisioning. 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 33 countries around the world on five continents. www.transunion.com/business