The national mortgage loan delinquency rate fell to 6.44% in the third quarter ended Sept. 30, the largest quarterly decline since the fourth quarter of 2006, according to an analysis by credit bureau TransUnion.

The rate is the ratio of borrowers 60 or more days past due. The large decline is viewed as a positive sign that the industry is improving, thanks to a stabilization in housing prices and record low interest rates for mortgage loans. The statistic traditionally is seen as a precursor to foreclosure.

The quarter-over-quarter decrease in the mortgage delinquency rate is twice the drop observed in either of the previous two quarters of 2010 on a percentage basis. It reflects a decrease of 3.45% from the previous quarter’s 6.67% national average.

Year over year, mortgage borrower delinquency is still up approximately 3.04% - from 6.25% in the third quarter 2009.

Highlights from the TransUnion report include:

· Mortgage borrower delinquency rates in the third quarter of 2010 continued to be highest in Nevada (15.12%) and Florida (14.63%), while the lowest mortgage delinquency rates continued to be found in North Dakota (1.52%), South Dakota (2.24%) and Nebraska (2.61%).

· Fifty-eight percent of the metropolitan statistical areas (MSAs) showed a decrease in their 60-day mortgage delinquency rates since last quarter.

· On a year-over-year basis at a national level, mortgage originations dropped 23%. The drop was across all states.

· The area with the highest average mortgage debt per borrower continued to be the District of Columbia at $368,255, followed by California at $342,695 and Hawaii at $309,536. The lowest average mortgage debt per borrower remained in West Virginia at $100,263.

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