Late-payment rate on mortgages down in third quarter

LOS ANGELES — Fewer U.S. homeowners are falling behind on their mortgage payments, aided by rising home values, low interest rates and stable job gains.

The trend brought down the national late-payment rate on home loans in the third quarter to a five-year low, credit reporting agency TransUnion said Tuesday.

The percentage of mortgage holders at least two months behind on their payments fell in the July-September quarter to 4.09 percent from a revised 5.33 percent a year earlier, according to the firm, whose data go back to 1992.

The latest rate also declined from 4.32 percent in the second quarter.

The last time the mortgage delinquency rate was lower was the third quarter of 2008.

Within a few years of setting that mark, foreclosures began to mount as home values tumbled from housing-boom highs, leaving many homeowners in negative equity — owing more on their mortgage than the value of their home. The dynamic drove mortgage delinquencies higher, peaking at nearly 7 percent in the fourth quarter of 2009.

The rate of late payments on home loans has been steadily declining over the past five quarters. At the same time, U.S. home sales and prices have been rebounding over the past two years, while foreclosures have been declining.

Moderate but stable job gains, still-low mortgage interest rates, and tight supply of homes for sale have helped fuel the housing rebound. That’s also made it easier for homeowners to refinance, catch up on payments or sell their home, avoiding foreclosure.

Even so, the mortgage delinquency rate is still above the 1 to 2 percent average historical range. That suggests that many homeowners still are struggling to make their payments. It also reflects that many home loans made during the housing boom remain unpaid but have yet to work their way through the foreclosure process.

Loans made in the years after the housing boom are generally being paid on time, so as more of the older loans listed on banks’ books as unpaid get resolved, the overall mortgage delinquency rate should continue to decline, said Tim Martin, group vice president of U.S Housing for TransUnion’s financial services business unit.

“The new mortgages are still performing very well, at very low delinquency rates,” Martin said. “That’s why we’re expecting more improvement to come.”

TransUnion forecasts that the national mortgage delinquency rate will drop to just under 4 percent by the end of year.

All the states posted an annual drop in late-payment rates during the third quarter, with California, Nevada, Arizona, Colorado and Utah registering declines of more than 30 percent.

TransUnion draws its data from 52 million installment-based mortgages in the U.S.

More in Herald Business Journal

Stan Jones (left) father of Vice Chairwoman Teri Gobin, gets a handshake from Jared Parks while Herman Williams Sr. hugs Bonnie Juneau (right) after the Tulalip Tribes and Quil Ceda Creek Casino held a groundbreaking ceremony for the new Quil Ceda Creek Casino Hotel on Tuesday at the Tulalip Reservation. The casino hotel will be built on 16 acres of ancestral tribal land and will feature a main casino that will showcase as many as 1,500 slot machines. (Andy Bronson / The Herald)
Tulalips break ground on new Quil Ceda Creek Casino Hotel

A 150-room hotel was added to what is now a $140 million project in Tulalip.

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Trudeau snubs Boeing, unveils plan to buy used Aussie jets

Trudeau will be assessing the impact fighter jet contracts have on his country’s economy.

Boeing raises dividend 20%, continues stock buyback program

The manufacturer said it has repurchased $9.2 billion worth of its shares this year.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Providence Hospital in Everett at sunset Monday night. Officials Providence St. Joseph Health Ascension Health reportedly are discussing a merger that would create a chain of hospitals, including Providence Regional Medical Center Everett, plus clinics and medical care centers in 26 states spanning both coasts. (Kevin Clark / The Daily Herald)
Merger would make Providence part of health care behemoth

Providence St. Joseph Health and Ascension Health are said to be talking. Swedish would also be affected.

Hospital companies merge as insurers encroach on their turf

An anticipated deal between Providence St. Joseph Health and Ascension is only the latest.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Most Read