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TransUnion: National Mortgage Loan Delinquency Rates Continue to Drop, Down 9% in 2012

CHICAGO, IL--(Marketwire - Aug 8, 2012) -  The national mortgage delinquency rate (the rate of borrowers 60 or more days past due) dropped for the second consecutive quarter, declining to 5.49% in Q2 2012. The mortgage delinquency rate has now dropped nearly 9% in the first six months of this year. 

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.

"While it is a positive sign to see mortgage delinquency rates decrease, meaning more and more homeowners were able to make their mortgage payments, the rate of the decline is still not at a pace that will push levels significantly closer to pre-recession norms," said Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit. "The pace of improvement should pick up when we review third quarter results, helped by a few months of relatively good news on home prices, this year's resurgence in refinance activity related to HARP 2.0 and record low mortgage interest rates."

Between the first and second quarters of 2012, all but five states experienced decreases in their mortgage delinquency rates. On a more granular level, 76% of metropolitan areas saw improvement in their mortgage delinquency rates in Q2 2012. This is up from the previous two quarters when 73% (Q1 2012) and 36% (Q4 2011) of the MSAs experienced improvement.

On a year-over-year basis, two of the states most negatively impacted by the mortgage crisis -- Arizona and California -- have seen the greatest improvement in mortgage delinquencies. Since the second quarter of 2011, California's mortgage delinquency rate has dropped nearly 22% to 6.13%, while Arizona's rate declined 21% to 6.14%. Both states had double-digit delinquency levels just two years ago. 

As in Arizona and California, many other states have experienced stabilization in home prices, though unemployment levels continue to remain stubbornly high. Looking at a multitude of economic factors, TransUnion's forecast predicts mortgage delinquency rates will maintain their downward trajectory for the remainder of 2012.

"The economy has not grown at a robust rate, but it does continue to slowly improve and we believe the improvement in mortgage delinquencies will follow a similar pattern," said Martin. "With steadying home prices, and mortgage interest rates remaining at extremely low levels, it appears that market conditions are set up to allow for further declines in the mortgage delinquency rate."

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.

Q2 2012 Mortgage Statistics - Delinquency Rates

Quarter-over-Quarter Q1 2012 Q2 2012 Pct. Change 
USA 5.78% 5.49% (5.02%)

Year-over-year Q2 2011 Q2 2012 Pct. Change
USA 5.82% 5.49% (5.67%)

Highest Mortgage Delinquency States  Q2 2012    
Florida 13.48%    
Nevada 10.85%    
New Jersey 8.15%    
Maryland 6.79%    

Lowest Mortgage Delinquency States Q2 2012    
North Dakota 1.32%    
South Dakota 1.94%    
Nebraska 2.24%    
Wyoming 2.41%    

Top 3 Year-over-Year Increases Q2 2011 Q2 2012 Pct. Change
Arkansas 3.24% 3.75% 15.74%
New Jersey 7.43% 8.15% 9.69%
Washington 4.92% 5.33% 8.33%

Top 3 Year-over-Year Declines Q2 2011 Q2 2012 Pct. Change
California 7.83% 6.13% (21.71%)
Arizona 7.78% 6.14% (21.08%)
Wyoming 3.01% 2.41% (19.93%)

Q2 2012 Mortgage Statistics - Mortgage Debt Per Borrower

Quarter-over-Quarter Q1 2012 Q2 2012  Pct. Change
USA $188,196 $188,341 0.08%

Year-over-Year  Q2 2011 Q2 2012 Pct. Change
USA $189,205 $188,341 (0.46%)

Highest Mortgage Debt States Q2 2012    
District of Columbia $374,709    
California $329,465    
Hawaii $314,415    
Maryland $248,832    

Lowest Mortgage Debt States  Q2 2012    
West Virginia $106,533    
Mississippi $108,672    
Oklahoma $113,537    
Arkansas $114,893    

Top 3 Year-over-Year Increases  Q2 2011  Q2 2012  Pct. Change
North Dakota $115,461 $120,241 4.14%
Ohio $126,503 $131,701 4.11%
West Virginia $102,807 $106,533 3.62%

Top 3 Year-over-Year Declines  Q2 2011  Q2 2012  Pct. Change
Nevada $224,100 $214,262 (4.39%)
Arizona $199,403 $193,169 (3.13%)
Florida $156,141 $152,781 (2.15%)

Supporting Resources/Links

TransUnion Trend Data Interactive U.S. Map

TransUnion 1Q12 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 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 32 countries around the world. www.transunion.com/business