Delinquencies Rise, Reversing Trend

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Just when it looked like the housing market might be stabilizing, the numbers are taking a surprising turn for the worse. At least according to a brand new report from TransUnion, the credit reporting firm.

"We had the feeling things were turning around," said the company's Veep of the financial services unit, FJ Guarrera. But, he went on to tell the Los Angeles Times, "...this uptick has got us turning a watchful eye on what's occurring. We didn't anticipate it."

The uptick Guarrera is referring to is a surprising increase in the rate of homeowners who are falling behind on their mortgage payments, as reflected in figures compiled by TransUnion for the fourth quarter of 2009.

Nationally, 6.9 percent of home loans are now 60 days or more past due -- a record high, according to TransUnion. That compares to just 4.58 percent in the final three months of 2008.
In some places, such as Riverside, California, the rate is an amazing 18.5 percent, notes the LA Times.

While these mortgage loan delinquencies have been rising nonstop for 12 quarters, the rate of increase had actually slowed in the three most recent quarters. That is why a few months ago you no doubt read about how there was optimism (usually preceded by the word "cautious") that the foreclosure crisis might be abating, delinquencies usually being a pretty good indicator of foreclosures to come.

Now, things are...well...up in the air. And, they could get worse!

TransUnion's outlook has turned slightly more pessimistic. "We believe that the 60-day mortgage delinquency rate will peak between 7.5 and 8 percent over the course of 2010, depending on the prevailing economic conditions associated with the housing market," said Guarrera in a press release announcing the findings.

In an interview with the Associated Press, Guarrera points out that in the coming months, many adjustable rate mortgages that were written back in 2006 and 2007 will be resetting to higher rates, opening up the very real possibility of even more late mortgage payments leading to even more foreclosures not too far down the road. "We're not out of the woods, yet," he tells the AP.

No, we're not! And, we may not even know how to find the exit sign.

Charles Feldman is a journalist, media consultant and co-author of the book, "No Time to Think: The Menace of Media Speed and the 24-hour News Cycle." He has written about real estate for several years.
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