Mortgage delinquencies increase in third quarter
From June to September of this year, the rate of homeowners who were delinquent on their mortgages increased. According to credit reporting agency TransUnion, 5.88 percent of mortgage holders were more than 60 days late on at least two mortgage payments, an increase from the previous quarter’s rate of 5.82. Only 10 states and the District of Columbia did not experience an increase in delinquency rates.
Economists had predicted that the delinquency rate would fall during the third quarter, so the increase was a surprise to most. There seems to be no apparent basis for the increase in delinquency, which is an early sign of potential repossession and foreclosure, so economists are working to find the reason for the jump.
Generally, an increase in delinquency is a direct reflection of a raise in the unemployment rate or a decline in housing prices. Both of those factors held steady through much of the third quarter, however, with housing prices even improving slightly in most major U.S. cities during the summer months.
The larger economic issues that played out during July and August may have affected homeowners, economists believe. For example, the United States’ credit rating was downgraded, many European countries experienced a debt crisis, and the U.S stock market suffered as a result of those and other factors. After an economic rollercoaster of a summer, reports indicated that consumer confidence was way down. This could lead homeowners to question the value of paying their mortgage.
Regardless of the reason, this hopefully will not lead to another jump in foreclosures. If you believe you are at risk of foreclosure, it may be in your best interest to contact an Atlanta bankruptcy attorney to discuss your options.
Source: CBS News, “Late mortgage payments up in 3Q, 1st rise in years,” Nov. 8, 2011