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17 Aug 09 Mortgage Delinquency Rate Climbs to All Time High

The delinquency rate on U.S. home loans reached an all-time high in the second quarter.  However the pace of growth for the mortgage delinquency rate slowed and some industry analysts see this as a possible sign the mortgage crisis may be beginning to turn the corner.  Data provided by credit reporting agency Trans Union shows the ratio of mortgage holders who are 60 days or more behind on their payments increased for the 10th straight quarter, to 5.81% nationwide for the three months ended June 30.  That’s up 65%, from 3.53%, in the 2008 second quarter.  Delinquency of 60 days is considered a forecasting sign to foreclosure, because of the difficulty homeowners would have coming up with two back payments to bring themselves current.

While the delinquency rate hit a new high, however, the increase from the 1st quarter to the 2nd was 11.3%. In the two prior quarters, the delinquency rate spiked almost 16%.  That slowdown may be a good sign, said FJ Guarrera, vice president of Trans Union’s financial services division. “We have reason to be cautiously optimistic,” he said.  While there’s no way to know exactly why the pace of growth is slowing, Guarrera said, it appears that loan modification programs aimed at helping distressed homeowners from both the FHA mortgage and conventional lenders are beginning to help. In addition, he said, consumers are being more careful with their spending.  Read the original article written by EILEEN AJ CONNELLY >


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