TransUnion: Mortgage Delinquency Rate Keeps Falling, Originations Up

The U.S. mortgage delinquency rate (loans 60 days or more past due) was about 2.40% in the third quarter – down about 30% from 3.36% in the third quarter of 2014 and down about 65% from its peak of 6.94% in the first quarter of 2010, according to TransUnion's Third Quarter 2015 Industry Insights Report.

Mortgage delinquencies continued to decrease across all age groups. Millennials and those who are 60 years old and older were the least risky, with delinquency rates of 1.62% and 1.77%, respectively, the credit bureau reports.

Every state witnessed a year-over-year decrease in the mortgage delinquency rate. Florida saw its mortgage delinquency rate drop the most: It was 3.75% in the third quarter, down almost half from 6.42% in the third quarter of 2014.

In addition, the top 10 largest metropolitan markets have seen their delinquency rates drop by about 33% in the past year. Miami and San Francisco saw their delinquency rates drop by more than 40%, according to TransUnion.

Joe Mellman, vice president and mortgage business leader for TransUnion, says the sharp decrease in delinquencies ‘is due to a combination of factors, including strong performance by recent vintage mortgage loans, improving home prices, and the continued funneling of delinquent accounts through the foreclosure process.’

Meanwhile, mortgage origination volume continues to tick upward: The report shows that mortgage originations (by loan count) in the second quarter reached about 2.01 million, an increase of nearly 40% compared with the third quarter of 2014.

The trend of super prime and prime plus consumers leading the pack in mortgage origination growth continues, with 50% and 40% year-over-year increases observed.

However, prime, near-prime and subprime populations also showed meaningful growth at approximately 30% each.

‘This is now the third straight quarter where we've not only seen year-over-year mortgage origination growth, but also significant increases in the higher risk populations of near prime and subprime – hinting at a loosening of credit or a change in the mix of borrowers seeking mortgages,’ says Mellman.


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