Mortgage delinquencies fall

December 12, 2013

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According to a recent report by TransUnion, the national mortgage delinquency rate - properties that are 60 days or more past due on their loans - is expected to decline to 3.75 percent by the end of 2014. At the end of 2013, the rate is estimated to conclude at 3.94 percent.

"TransUnion expects the national mortgage delinquency rate to continue its downward trend, though we see a few obstacles in 2014 that will limit the decline and keep it well above 'normal' levels," said Tim Martin, vice president of TransUnion's financial services business unit.

The forecasted rate will represent the fifth consecutive year of decline, though the decrease will be the smallest of these years. The slowdown is likely due to an increase in mortgage rates. The Federal Reserve is expected to reduce its stimulus spending sometime in 2014 and mortgage rates are anticipated to rise once the tapering takes effect.

"The primary reason for the slowdown will be the pending rise in interest rates, which may hinder home sales while also blocking refinancing as an exit strategy for some mortgage borrowers," Martin stated. "Additionally, foreclosure timelines continue to expand in many states, keeping longer vintage delinquencies in the system."

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