Nationwide, the rate of homeowners who have fallen behind 60 days or more on their mortgage payments has dropped to its lowest level in more than three years, according to TransUnion, one of the three national credit bureaus.
The rate for the first quarter of 2012 came in at 5.78% and the bureau reported that his reverses two quarters of increases that began in the third quarter of last year.
“To see that quarter over quarter, and year over year, more homeowners were able to make their mortgage payments is certainly welcome news,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit.
“Before this, we saw two quarters of delinquency increases and while we are still about three-times above the pre-recession norm, this should mark the start of consistent improvement each quarter,” Martin said.
The bureau noted house prices continue to face downward pressure and unemployment remains high, but many see the economic environment beginning to show modest improvement. Therefore, TransUnion’s forecast predicts mortgage delinquency rates to drift downward in 2012 as more homeowners are able to repay their mortgage debt obligations.
“We have seen increased traction of refinance activity related to HARP 2.0, a program that makes it easier for homeowners with negative equity in their home to refinance,” Martin said.
“Going forward, as these homeowners take advantage of the historic low mortgage interest rates, and perhaps lower their monthly payment in the process, it may have some positive impact on the overall delinquency rate starting later this year,” he said.