Mortgage Delinquencies to Decline in 2012: Study

By: Krista Franks

The current year will close with a 7 percent yearly decline in mortgage delinquencies, matching last year’s decline, according to predictions released Wednesday by TransUnion.

The percent of borrowers 60 days or more delinquent will fall to 5.95 percent by the end of the year, and will fall to 5 percent by the end of 2012, according to TransUnion.

However, despite yearly declines, the forecasters expect a slight rise in delinquencies through the first quarter of 2012.

After reaching 6.02 percent in the first quarter, delinquencies will decline for the following three quarters, the forecasters predict.
Tim Martin, group VP of U.S. housing in TransUnion’s financial services business unit, believes house prices and unemployment will continue to pose problems for the market in the coming year, but the market will see some positive movement due to “improving credit quality of new originations, consumer confidence, and GDP.”

“If things go as expected, there are no additional negative shocks to the U.S. economy and the average borrower’s situation, mortgage delinquencies could fall as much as 16% in 2012 compared to 2011,” Martin said.

While the nation is expected to experience overall declines in mortgage delinquencies in the coming year, 12 states and the District of Columbia will likely see increases. Thirty-eight states will experience declines.

TransUnion expects Florida, Nevada, and the District of Columbia to close the fourth quarter of 2012 with the highest delinquency rates.

Florida and Nevada will be seeing double-digit delinquency rates at 13.20 percent and 11.09 percent respectively. The District of Columbia will follow with a rate of 7.91 percent.

At the other end of the spectrum, North Dakota will see the lowest delinquency rate in the nation at the end of 2012 at 1.3 percent.

South Dakota and Wisconsin will follow with rates of 1.96 percent and 2.11 percent respectively.

URL to original article: http://www.dsnews.com/articles/mortgage-delinquencies-to-decline-in-2012-study-2011-12-07

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