Mortgage Delinquencies Show Slight Decline

The rate of mortgage delinquencies – borrowers who are one payment late – fell slightly between the 3rd and 4th quarters of 2009 from 9.64 percent to 9.47 percent.  According to the Mortgage Bankers Association (MBA), a fourth quarter decline is unusual — even when there is no recession — because winter and the holidays typically mean that homeowners have extra expenses.

Jay Brinkmann, the MBA’s chief economist, offered this upbeat perspective.  “We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007.  With fewer new loans going bad, the pool of seriously delinquent loans and foreclosures will eventually begin to shrink once the rate at which these problems are resolved exceeds the rate at which new problems come in.”

Despite the good news, delinquencies nationwide are still significantly higher than in the 4th quarter of 2008, when the rate was reported at 7.88 percent.  The pain is concentrated in two states.  In Florida, 26 percent of homeowners are one or more months late in making their payments; 24.7 percent of Nevadans are having trouble paying their mortgages.