TransUnion said today that the serious mortgage delinquency rate is heading downhill at a quickening pace, however long term delinquencies and the slow process of resolving them are impeding a return to more normal rates.   According to year-end data from the credit reporting company, the rate of serious delinquencies - 60 days or more - fell 14 percent in 2012 compared to 7% in 2010 and 6% in 2011.  By contrast, when rates were rising, from 2007 to 2009, they increased by at least 50 percent each year.

The final quarter of 2013 was the fourth consecutive one in which the 60+ day rate declined, dropping from 6.01 percent in Q4 2011 to 5.19 percent in Q4 2012.  The rate was 5.41 percent at the end of Q3 2012.  TransUnion expects the mortgage delinquency rate to continue its downward trend in the first quarter of 2013, though it will likely remain above 5%.

"The national mortgage delinquency rate experienced its largest yearly decline since the conclusion of the recession, though we still remain far above normal levels," said Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit. "For the most part, newer vintage mortgage loans are not the reason for the stubbornly high delinquency rate. They are performing relatively well. The elevated delinquency levels that we still are experiencing are a result of older vintage loans -- borrowers who haven't been making their payments for a rather long time -- that are still in the system, inflating the overall rate.

"The declines in the mortgage delinquency rate will likely be muted for the foreseeable future as the foreclosure process in some states can take more than 1,000 days," said Martin. "It's not clear yet, but recently announced regulatory rules related to mortgage servicing may tend to slow down this process further. What is clear from the data TransUnion collects is that, until the old vintages work through the system, we expect the delinquency rate to remain elevated."

On a quarter-over-quarter basis thirty-seven states and the District of Columbia experienced improvement in their mortgage delinquency rates along with 81.4 percent of metropolitan statistical areas (MSAs).   The greatest declines were experienced in Arizona (-30.93 percent), California (-29.55 percent), and Utah (-20.89 percent.)

On a year-over-year basis all but three states, Maine (+4.26 percent), Arkansas (+3.02 percent), and North Dakota (+2.00 percent), had delinquency rate decreases.  North Dakota, however still has the lowest rate in the nation, 1.53 percent, followed by South Dakota (1.97 percent) and Nebraska and Alaska tied at 2.20 percent. The highest rates of delinquency are in Florida at 12.47 percent, Nevada (10.45 percent), and New Jersey (7.72 percent.)

The average mortgaged homeowner in the U.S. was carrying mortgage debt of $186,785 in Q4 compared to $188,194 a year earlier, a -0.75 percent change.  The states with the highest average mortgage debt were the District of Columbia ($375,353), California ($324,867), and Hawaii ($315,721.)

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