In the fourth quarter of 2009, the number of mortgage delinquencies dropped to 9.47%, down from 9.64% at the end of the third quarter of 2009. The information was produced by the National Delinquency Survey, which is arguably the most recognizable source for information pertaining to mortgage delinquency and foreclosure. Produced by the Mortgage Bankers Association, the National Delinquency Survey presents quarterly delinquency and foreclosure data on the national, regional and state level.
This information indicates the mortgage market may finally be on an upswing. Even if the .17% decline in delinquencies is so small it seems trivial, it undoubtedly is not. This reduction in mortgage delinquencies denotes the first decline since 2006. Jay Brinkmann, the Chief Economist and Senior Vice President of Research and Economics for the Mortgage Bankers Association said, “We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007, continued with the meltdown of the California and Florida housing markets due to overbuilding and the weak loan underwriting that supported that overbuilding, and culminated with a recession that saw 8.5 million people lose their jobs.”
While the rate of delinquencies remains 1.59% higher than it was in the fourth quarter of 2008, Brinkmann believes the pattern of mortgage delinquencies will parallel the unemployment figures. According to the Bureau of Labor Statistics, the national unemployment rate finally fell below 10% to 9.7% in January. If that is any indication of what’s to come, mortgage delinquencies should continue to decline as well. The next release of employment information is scheduled for March 5, 2010.
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