The economy appears to be in recovery mode. According to the New York Times more and more people are staring to pay their mortgages on time. Before the current recession only about 5% of all mortgages were delinquent. At the height of the recession over 12% of all mortgages were delinquent. Currently, the percentage of delinquent mortgages stands at over 7%. As good the new statistics may seem, it may be a little misleading considering that many people who were delinquent probably lost their homes through foreclosure or short sale.
FEWER homeowners have been falling behind on their mortgage payments over the last two years, yet even with the improvement, a significant number still are delinquent or in foreclosure.
Being in such a predicament almost always proves costly for borrowers — both in terms of fees they will owe and the lower credit rating that will result.
Mortgage delinquencies are “about halfway back to long-term prerecession levels,” said Jay Brinkmann, the chief economist for the Mortgage Bankers Association, in its fourth-quarter delinquency report, which was released last month. Some 7.58 percent of all residential loans were delinquent at the end of 2011, down from a 10 percent high in 2010 but well above the 5 percent prerecession average. All together, 12.63 percent — one in eight homeowners — were in trouble or in foreclosure at the end of the year, the association reported.
Meanwhile a separate report last month, from the credit-reporting agency TransUnion, found that delinquency rates fell to 6.01 percent in the fourth quarter of 2011 from 6.4 percent the same period the year before, though they rose slightly from the third quarter. Delinquencies of 60 days or more are expected to rise again in the first quarter of 2012, then decline the rest of the year, said David Blumberg, a TransUnion spokesman.