Mortgage delinquencies will nearly double in 2009

TransUnion LLC., An Credit reporting agency, released data today severe delinquencies among mortgage holders increased more than 50 percent from year-ago levels during the third quarter. At the end of Q3, 3.96 percent of homeowners were 60+ days in arrears, compared to 2.56 percent one year earlier; historically, the severe delinquency rate has held the line at roughly 2 percent.

The agency also said that severe delinquencies could reach as high as 4.7 percent before this year is out, an estimate that reflects the effect of job loss and an extended recession. With an estimated 7.6 million U.S. households currently owing more on their home than it is worth, according to a recent study by First American CoreLogic, very few of these households will be able to refinance, even if incomes remain stable. There are a lot more loans that will be resetting throughout 2009 through 2011.

TranUnion said it now expects as many as 7.8 percent of homeowners in Florida to be delinquent by the end of this year, and another 7.7 percent of Nevada borrowers to find themselves in a similar position.

The agency forecast that North Dakota would see a 1.4 percent severe delinquency rate, followed by South Dakota, at 1.6 percent, Montana at 1.7 percent, Vermont at 1.8 percent and Wyoming at 2 percent.

California, Nevada, Florida and Arizona accounted for 38.4 percent of all originations in 2006, according to HDMA data. North Dakota, South Dakota, Montana, Vermont and Wyoming totaled just 0.6 percent of the entire market for mortgages — in fact, four of the five states were the very bottom of the market share table, according to HDMA data.

Sources :

1. The Wallstreet Journal: Delinquent Mortgages Set to Nearly Double in 2009, December 2, 2008, 9:57 A.M. ET
2. Housing Wire: Mortgage Delinquencies Set to Soar: Report, December 2, 2008

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