national mortgage delinquency rate was down by nearly a quarter in the June-September
period compared to the third quarter of 2012, marking the seventh straight
quarter in which mortgage delinquencies declined. TransUnion said today that delinquencies of 60
days or more were down 23.3 percent since the third quarter of 2012 to a
national rate of 4.09 percent. The rate in third quarter of 2012 was 5.33 percent
and it was 4.32 in the second quarter of 2013.
improvement was indeed national with every state and the District of Columbia seeing
a drop in its rate on an annual basis. Five states -- California, Arizona, Nevada, Colorado and
Utah -- experienced 30%+ declines in their mortgage delinquency rate. Three
states -- California, Florida and Nevada -- had double-digit percentage drops
in the last quarter. None-the-less both Florida and Nevada continue to have
rates well above the national average at 9.11 percent and 7.28 percent
"This isn't a sample data
set," said Tim Martin, group vice president of U.S Housing for
TransUnion's financial services business unit. "We looked at all 52
million installment-based mortgages in the U.S. and the trend is clear -- the
percentage of borrowers willing and able to make their mortgage payments
continues to improve. The overall delinquency rate is still high relative
to 'normal,' but a 23% year over year improvement is great news for homeowners
and their lenders."
The company expects that the
downward trend in delinquencies will continue for the remainder of the year. While the forecast could change if there are unanticipated
shocks affecting unemployment, real estate values, income or other economic
factors, TransUnion is projecting the delinquency rate will be just under 4 percent by the end of 2013.
Non-prime borrowers, those with a
credit score below 700, continue to represent a smaller portion of all mortgage
loans, down 50 percent from 2007.
Non-prime borrowers constituted 5.82 percent of all new mortgage originations
in Q2 of 2013 compared to 12.69 percent in the second quarter of 2008. TransUnion reports mortgage data one quarter
in arrears to ensure all originations have been recorded.
The company reported that there was
2.34 million new mortgage accounts in the second quarter of 2013 (indicating mortgage
originations) compared to 2.09 million a year earlier and a major increase from
that quarter in 2010 when only 1.32 million new accounts were opened.
TransUnion now maintains 52.31 million mortgage accounts compared to 54.23 accounts
a year earlier and 63.14 million in the third quarter of 2008 prior to the
"New mortgage originations
showed good growth through the second quarter of this year, largely the result
of increased refinance transactions driven by low rates and increasing home
prices," said Martin. "However, mortgage rates started to
increase right around Memorial Day, and when the data come out next quarter, we
expect it to show that new originations are decreasing as a result."
The data provided are gathered from
TransUnion's proprietary Industry Insights Report, a quarterly overview
summarizing data, trends and perspectives on the U.S. consumer lending
industry. The report is based on anonymized credit data from virtually every
credit-active consumer in the United States.