Mortgage Delinquencies Decline in First Quarter of 2014

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The Federal Savings Bank shares news from a recent TransUnion report regarding mortgage delinquencies.

VA and FHA home loans at The Federal Savings Bank

The Federal Savings Bank

the dwindling mortgage delinquency rate can be encouraging news for consumers who have been considering a new home purchase.

Home loan performance continues to improve during the housing recovery, according to a recent May 7th report from TransUnion. The Federal Savings Bank confirms a recovery in loans occurred during the 1st quarter of 2014.

In the first quarter of 2014, the mortgage delinquency rate, which is the share of home loans that are 60 or more days late, dropped to 3.61 percent, down from 3.85 percent in the fourth quarter of 2013, representing 6.2 percent decline. Compared to the same quarter the previous year, there was a 24.2 percent decrease, as the rate was 4.76 percent in the first quarter of 2013. This was the ninth consecutive period of quarter-to-quarter declines.

"It's encouraging to see mortgage delinquencies drop once again, especially during a period when mortgage originations slowed considerably," said Steve Chaouki, TransUnion head of financial services. "This trend in improved performance is driven in part by lenders working their way through the foreclosure backlog, along with continued conservatism in underwriting new mortgages."

The Federal Savings Bank finds that as the housing recovery continues and the economic downturn fades further into the past, the dwindling mortgage delinquency rate can be encouraging news for consumers who have been considering a new home purchase. Also, Americans are more optimistic about the housing market.

State-level figures on par with the nation

TransUnion found that each of the 50 states and the District of Columbia showed declines for their mortgage delinquency rates in the first quarter of 2014 compared to the previous quarter. The most noticeable progress was seen in states that were hit hardest during the housing downturn, with Arizona (37.8 percent), California (36.9 percent) and Nevada (34.0 percent) showing significant declines. Furthermore, Arizona and California are doing much better than the nation.

North Dakota, South Dakota and Nebraska had the lowest mortgage delinquency rates, at 1.08 percent, 1.44 percent and 1.60 percent, respectively. Conversely, Nevada (6.11 percent), New Jersey (6.84 percent) and Florida (7.64 percent) had the highest rates.

There were more mortgages in the first quarter

As further evidence that consumers have regained confidence in financing a home purchase with a low cost mortgage, the total number of home loans increased in the first quarter of 2014. TransUnion said that the number of mortgage accounts rose from 53.06 million in the first quarter of 2013 to 53.47 million in the first quarter of 2014. The Federal Savings Bank, a Midwest lender, confirms that the number of home loans grew but more so at the end of the 1st quarter.

For information about how you can get a home loan, contact the Federal Savings Bank, a veteran owned bank.

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Giorgio Urbano Ferrero
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