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TransUnion's annual credit forecasts indicate national mortgage loan delinquencies (the ratio of borrowers 60 or more days past due) will drop nearly 3% by the end of 2010 to 6.39% from an expected 6.56% at the end of 2009, according to the credit bureau's newly released data.
The projected decrease in mortgage delinquencies would end a trend that included unprecedented year-over-year increases of 54% between 2006 and 2007, 53% between 2007 and 2008 and 43% between 2008 and 2009.
"We believe the nation will see a turnaround in mortgage delinquencies in the coming year," says Ezra Becker, director of consulting and strategy at TransUnion's financial services group. "Tied directly to anticipated unemployment rates and housing values, the decrease in delinquencies should be gradual.
"This is a dramatic shift from the 43% to 54% year-over-year increases we have seen the last three years. We expect this change to be driven in part through the continued conservative approach lenders are taking to new loan underwriting, as many of the existing mortgages in the market work their way out of the system and off the books of lending institutions."
Though the projected rate of decrease in mortgage delinquencies will be relatively slow for a majority of the nation, 22 states are expected to experience double-digit decreases in delinquency as housing values in those states are forecasted to improve.
The states with the greatest decrease in mortgage delinquencies are expected to be North Dakota (-17.93%), Minnesota (-15.00%) and Oklahoma (-14.42%). Five states are expected to see increases in mortgage delinquencies, including Florida (17.34%), Arizona (6.26%), California (0.93%), New York (0.43%) and Virginia (0.37%).
Florida is expected to have the highest mortgage delinquency rate by the end of next year at 16.86%, followed closely by Nevada at 16.14%. North Dakota (1.43%), South Dakota (2.20%) and Nebraska (2.35%) should have the lowest delinquency rates.
Current mortgage delinquency data for the nation and every state can be found at www.transunion.com/trenddata. The source of the underlying data used for this analysis is TransUnion's Trend Data, a database 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.
