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Mortgage Delinquencies Fall To Lowest Level Since 2007

The TransUnion Industry Insights Report, released on Monday, May 18, 2015, reveals that the rate of borrowers 60 days or more delinquent on their mortgages declined to 2.95% in the first three months of 2015 – the first time the variable has been below 3% since prior to the recession in 2007.

This also marks the 13th consecutive quarterly drop in the mortgage delinquency rate.

The quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry, isn’t all wine and roses. The delinquency rate for subprime consumers remains at 27.23%. This is down from the peak of 40.48% in 2010, but is still shows that we’ve got a long way to go on the lower end of the spectrum.

Los Angeles has one of the lowest delinquency rates in the nation at a paltry 2.07% – tied with Phoenix and just slightly higher than San Francisco.

On the high end New York stands at 5.71%, beaten by only Miami at 6.15%.

A few other notable points of the report:

Average mortgage balances per consumer also continued to increase on both a quarterly and yearly basis to $187,175 in Q1 2015. Mortgage balances were at $186,836 at this same time last year, and at $187,139 in Q4 2014.

The share of mortgage balances held by consumers who are currently subprime and near-prime dropped by 9.8% and 2.9% respectively, which is consistent with recent years. Subprime and near-prime consumers currently hold only 32% of the total balances they held at the beginning of 2010. By comparison, prime, prime plus, and super-prime consumers hold roughly the same amount of mortgage balances as they did at the beginning of 2010.

What does it all mean?

  • More people are paying their mortgages than was the case even a few months ago
  • Fewer people have subprime mortgages – due in large measure to the fact that so many subprime borrowers lost their homes to foreclosure in the 2007-2014 period
  • Those who do have mortgages are paying more than they were last year, which means prices are going up again
  • Subprime borrowers continue to struggle with past due mortgage payments far more often than others

Here’s a link to the report.

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By |May 18th, 2015|

About the Author:

I’ve been a consumer protection lawyer since 1995, working to help people end their bill problems. I’m a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.

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