TransUnion is reporting that serious mortgage delinquencies rose during the fourth quarter of 2011 for only the second time since the end of 2009.  The rate increased 13 basis points from 5.88 percent in the third quarter to 6.01 percent. 

The increase was widespread; 37 percent of the states reported increases as did 64 percent of metropolitan areas.  The latter figure is unchanged from Quarter 3 but up substantially from the 21 MSAs that experienced an increase in Quarter 2.  New Jersey and Vermont had the largest annual increases.  Their delinquency rates rose between Quarter 4, 2010 and Quarter 4, 2011 by 11.98 percent and 11.11 percent respectively.  South Dakota had an increase of 10.36 percent.  Arizona, California, and Wyoming had the greatest decreases in their rates, all three in the range of 20 percent.

The highest serious delinquency rates, defined as over 60 days, were reported in Florida (14.27 percent), Nevada (12.08 percent) New Jersey (8.32 percent) and Arizona (7.50 percent) and the lowest rates in North Dakota (1.50 percent), South Dakota (2.45 percent), Nebraska (2.57 percent) and Alaska (2.77 percent).

"To see that, quarter over quarter, fewer homeowners were able to make their mortgage payments is not welcome news," said Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit. "However, it was not unexpected. First, there tends to be a natural seasonality, evident well before the recession, of higher delinquencies in the fourth quarter; perhaps explained by borrowers balancing holiday spending vs. debt payments. Secondly, on the economic front, house prices continued to deteriorate in the fourth quarter and unemployment remained stubbornly high. This combination leads to more negative equity in homes and reduced real personal income that can affect borrowers' ability and willingness to pay their mortgages.