Think our tough economic times are going to come to an end any time soon? Don’t bet on it. Home mortgages, which appear to be the bottom brick in the foundation of our economic system, are expected to adjust upwards as their adjustable rates teasers come to an end in 2009 – 2011.

The number of consumers with delinquent mortgages is poised to almost double by the end of next year, hitting its highest level in at least 16 years, according to a leading credit bureau. TransUnion LLC, which analyzed about 27 million consumer records in its database, predicted last weethat the proportion of consumers with mortgages that are 60 days or more past-due will hit 7.17% in the fourth quarter of 2009.

Well wake up, TransUnion! In a Dec 6 article, the Arizona Republic reported that the national mortgage-delinquency rate is 7 percent – already nearly reaching reaching TransUnion’s 4th quarter 2009 prediction.

The Arizona Republic also reported that Arizona’s mortgage-delinquency rate climbed to 7.39 percent at the end of the third quarter, on Sept. 30, according to new data from the Mortgage Bankers Association. (Where are they getting this data? Why is it so different from TransUnion’s?) At the end of the second quarter, on June 30, about 6.05 percent of the state’s homeowners were late with payments. Mississippi leads the nation in mortgage delinquencies, with about 11.7 percent of mortgages now past due. Louisiana follows with 10 percent, and Michigan is third at 9.7 percent.

TransUnion also stated in a release from the Associated Press that credit card delinquencies rose from 1.03 percent to 1.09 percent. This is an astonishing fact in my opinion. The credit card delinquency rate 7 times less than than the mortgage rate delinquency? A fundamental in money management is that you should always make your mortgage payment, even if you have to let other payments slide. But maybe it’s because it’s easy to make a $50 credit card minimum payment than a $2000 mortgage payment.

No matter whose numbers you look at, all of them point to an increase in delinquencies of all kind. Take heart people, the 7.07% rate in mortgage delinquencies doesn’t equate to 7.07% mortgage default rate, though 60 day delinquencies could certainly turn into defaults.

No related posts.