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About 2.5 percent of current mortgage balances in the U.S. transitioned into delinquency during the third quarter, according to a new report issued by the Federal Reserve Bank of New York Monday.
That assessment reverses a recent trend of reductions in the measure of newly delinquent mortgage balances. Prior to the rise in the most recent quarter, the Federal Reserve had recorded declines in the percentage of current mortgages falling behind on payments going back to the third quarter of 2010.
The rate of transition from early (30-60 days) into serious (90 days or more) delinquency also rose slightly, with 31.3 percent of early stage delinquencies moving into the seriously delinquent bucket during the third-quarter period.
The New York Fed says deterioration among delinquent mortgages was accompanied by a significantly lower cure rate, with the transition rate from early delinquency to
“current” decreasing over 4 percentage points in the quarter.
About 264,000 individuals had a foreclosure notation added to their credit reports between June 30 and September 30 – a 7 percent decrease when compared to new foreclosures during the second quarter. New bankruptcies during the third quarter tallied 423,000, down on both a quarterly and annual basis.
Mortgage balances on consumer credit reports fell by approximately $114 billion or 1.3 percent over the third quarter while home equity lines of credit (HELOC) balances increased by roughly $14 billion or 2.3 percent.
Mortgage originations, which the Fed measures as appearances of new mortgages on consumer credit reports, fell for a second consecutive quarter to $292 billion. Mortgage originations in the third quarter of this year were 17 percent below the previous quarter’s level and 24.7 percent below a year ago.
At $292 billion, mortgage originations last quarter were at their lowest level since mid-2000.
Household mortgage and HELOC indebtedness are now 9.6 percent and 10.5 percent, respectively, below their peaks.
Consumer debt overall declined by approximately $60 billion to $11.66 trillion between the second and third quarters.
Andrew Haughwout, VP in the research and statistics group at the New York Fed, says the decline in outstanding consumer debt reveals that households continue to try and deleverage in the wake of a challenging economic environment and large declines in home values.
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Past Due Mortgages = 6,298,000
There were 6,298,000 mortgages going unpaid in the United States as of the end of October, according to Lender Processing Services (LPS).
It’s a daunting number, but the data show that it’s actually been on a fairly steady decline for nearly two years now.
At the start of 2011, the total number of non-current mortgages in the U.S. stood at 6,870,000. In January 2010, it was 8,118,000.
LPS’ more recent reports show the industry is slowly but surely chipping away at the number each and every month – the result of both loss mitigation workouts and removing loans that cannot be resolved from the inventory through foreclosure.
At September month-end, the tally of non-current mortgages was 6,373,000. It was 6,397,000 at the end of August and 6,538,000 at the end of July.
LPS’ data indicates mortgage delinquencies are declining while the nation’s foreclosure inventory is growing.
Of the 6,298,000 loans past due at the end of October, 2,329,000 were behind on their payments by 30-89 days and 1,759,000 were 90 or more days delinquent but not yet referred to foreclosure.
Combined, these tallies represent 7.93 percent of the nation’s outstanding mortgages that are delinquent but not in foreclosure. The October delinquency rate is down 2.0 percent from the previous month and is 14.6 percent lower than the rate recorded in October 2010.
The foreclosure inventory rate, on the other hand, is up by both measures. LPS says 4.29 percent of the nation’s mortgages are winding their way through the foreclosure process, a month-over-month increase of 2.5 percent and a year-over-year increase of 9.4 percent.
By LPS’ calculations, there were 2,210,000 residential mortgage loans in foreclosure at October month-end.
States with highest percentage of non-current loans – which combines foreclosures and delinquencies – include: Florida, Mississippi, Nevada, New Jersey, and Illinois.
Montana, Wyoming, South Dakota, Alaska, and North Dakota have the lowest percentage of non-current loans
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