Delinquencies Up Again, But Pace Slows

New York, NY, Nov. 17, 2009--The overall mortgage delinquency rate hit another record, according to credit reporting agency Transunion.

However, the pace of delinquencies slowed.

For the three months ended Sept. 30, 6.25 percent of U.S. mortgage loans were 60 or more days past due, TransUnion said. That's up 58 percent, from 3.96 percent, a year ago.

Being two months behind is considered a first step toward foreclosure, because it's so hard to catch up with payments at that point.

The rate was up 7.6 percent from the second quarter. That's a much smaller jump than the 11.3 percent rise in the second quarter from the first, and the 14 percent leap seen in the quarter before that.

While the slowing growth rate is a positive sign, the increase shows there's still a lot of problematic mortgages out there, said F.J. Guarrera, vice president of TransUnion's financial services division. The company doesn't expect the figure to start declining until the middle of 2010.

He said two things must get better before mortgage delinquency rates start reversing themselves, home values and unemployment.

TransUnion expects delinquency to rise to just short of 7 percent for the fourth quarter, compared with 4.6 percent for the 2008 fourth quarter.