27 Feb Mortgage Delinquency Expected to Decline in 2012
The number of borrowers who are 60 days or more behind on their mortgage payments is expected to decline this year. Current estimates point to 2012 decreases staying in line with 2011 reductions; the number of delinquencies in 2011 was 7% lower than at the end of 2010.
As the employment market improves and credit markets loosen, borrowers are expected to have better opportunities to avoid delinquency. The development is expected to help overall consumer confidence and the GDP of the U.S. Real estate has become one of the most stubborn legacies of this recession, with some states seeing mortgage delinquencies of more than 20%. Repossession of properties has left banks with a glut of vacant properties on their books; tight credit markets have locked out many buyers who, just four years ago, wouldn’t have had any problem qualifying for a mortgage.
While the nation’s overall delinquency rate is expected to fall in 2012, high unemployment in states like California, Florida, and Nevada will likely lead to a further uptick in the number of borrowers falling behind in 2012. In those markets, economists estimate the delinquency rate could increase in 2012 by nearly 12% over 2011 rates.