Nevada’s late-payment record improves

NEW YORK -- Late payments on mortgages ticked up in the last three months of 2011, the second straight quarter-to-quarter increase after nearly two years of steady decline, but there were improvements in Nevada.

Of note were sharp declines in delinquency in Arizona, where the rate plunged to 7.5 percent from 9.7 percent a year ago, and California, to 7.14 percent from 9.14 percent in the 2010 fourth quarter. The two states are among the four hardest hit by the housing and foreclosure crisis.

Nevada, where the housing market also has been hit hard, saw delinquencies decline sharply as well, to 12.08 percent from 14.76. Florida, which remains the state with the highest delinquency rate, saw a far smaller decline, to 14.27 percent from 14.5 percent.

Credit reporting agency TransUnion said 6.01 percent of mortgage holders were behind on their payments by 60 days or more in the October-to-December period. That compared with 5.88 percent for the third quarter of 2011.

The rate is down significantly from the fourth quarter of 2010, when 6.41 percent of mortgage holders were behind by two or more months. But the uptick is still unwelcome news.

"We were hoping for better, because delinquencies remain very high," said Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit. Before the housing bust, the mortgage delinquency rate typically hovered around 2 percent.

What's more, while the national rate fell from the prior year, 18 states showed delinquency increases from the 2010 period. Leading the increases was a big jump in New Jersey, where the rate went to 8.32 percent from 7.43 percent.

While the national rate is still far above normal, Martin said the increase in the fourth quarter may in part reflect a return to seasonal patterns that disappeared during the economic downturn. Historically, delinquencies rose in the fourth quarter as some homeowners directed their funds elsewhere.

"We were certainly off pattern for the last couple of years," Martin said.

He added that while the increase is not good news, the year-over-year decline is encouraging and points to a continued, if slow, recovery in the housing market.

He noted that housing prices continued to decline during the quarter, a key factor for homeowners struggling to keep up with their payments.

Prices dropped in November from October in 19 of the 20 cities tracked by the Standard & Poor's/Case-Shiller home-price index. Only Phoenix showed an increase. And with a large number of vacant homes on the market, prices are not expected to rise for several years.