DAILY REAL ESTATE NEWS | THURSDAY, FEBRUARY 13, 2014
Mortgage delinquencies nationwide have plummeted to their lowest level in more than five years, as more home owners are coming out of the red on their payments, according to credit reporting agency TransUnion.
The number of borrowers who are at least two months behind on their mortgage payments dropped to 3.85 percent in the fourth quarter of 2013. A year prior, the delinquency rate stood at 5.08 percent.
Nevertheless, the mortgage delinquency rate is still about twice as high as it was prior to 2007.
“We are on the downward slope of the mortgage delinquency curve, so we expect to continue seeing delinquency rates that have not been seen for several years,” says Steve Chaouki, head of financial services for TransUnion.
Struggling home owners are shoring up their finances as home values and equity rise, the job market improves, and refinancing helps to lower their monthly payments, the survey notes. Plus, “many of the risky home loans made before 2008 that went unpaid are no longer a factor, since the homes have been sold or foreclosed upon,” the Associated Press reports. “Loans issued since then, after banks tightened lending standards, are less likely to go unpaid.”
What’s more, with rising home values, borrowers increasingly are saying that keeping up with their mortgage payments is a priority over other financial obligations — a reversal from the days of the recession, says Chaouki.
The states that posted the largest annual declines in the mortgage delinquency rate were Arizona, California, and Nevada. New York and New Jersey were the only two states that did not post a double-digit percentage drop in their mortgage delinquency rates, according to TransUnion.
Source: “Fewer Americans Fall Behind on Mortgage Payments,” The Associated Press (Feb. 12, 2014)