Mortgage Delinquencies Rose in Late 2011

Updated: February 22, 2012 at 1:22 am PST

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There is no doubt that the recession has caused a lot of grief for millions of Americans. The unemployment rate, although hopeful at times, has remained mostly bleak. Since the housing crisis began in the late 2000s, home prices have fallen significantly. This combination of job loss and negative home equity has deeply affected people’s capacity to make their mortgage payments on time.

TransUnion, the global credit information service agency, reported that the U.S. mortgage delinquency rate hit 6.01% in the last quarter of 2011. This means that 6.01% of Americans were two months behind on their mortgage payments – a .13% jump from the previous quarter’s rate of 5.88% and a huge leap from the pre-recession rate of 2%.

With rising mortgage delinquency rates, higher foreclosure rates are expected to follow. A downward spiral starting with mortgage delinquency, leading to foreclosure, and resulting in bad credit could put many Americans into a further worse economic state.

The delinquency rate rose in 37 states in late 2011 with Florida, Arizona, Nevada, and New Jersey taking the lead. New Jersey, Vermont, and South Dakota have faced the largest percentage change in the past year, each with percentage changes of over 10%.

Although mortgage delinquencies rose in late 2011, Tim Martin of TransUnion’s financial services business unit remains hopeful: “Although house prices and unemployment will likely face continued pressure next year, this forecast calls for gradual improvements in the second half of 2012 to other key variables, like improving credit quality of new originations, consumer confidence and GDP, that will positively influence homeowners’ ability and willingness to pay their mortgages.”

Mortgage Delinquency