During the last quarter of 2011, Trans Union credit reporting agency reports more than 6% of all mortgage holders in the United States were behind on their mortgage payments by 60 days or more. It should be noted prior to the housing crisis that exists in America, the delinquency rate on mortgages was usually in the area of 2%.
Tim Morton, a group Vice President of US Housing in the Trans Union financial services unit, stated “the more encouraging news is when looking year over year the delinquency rate dropped over 6%! At this pace it will take a very long time for mortgage delinquency rates to get back to normal.”
Delinquency rates have been decreasing in Arizona and California. Florida, which is the state with the highest delinquency rate, has a mortgage delinquency rate of approximately 14.5%!
The recent settlement by the five largest banks concerning mortgage improprieties may result in as many as one million mortgage holders having a reduction in the size of their mortgages.
Stabilization of Home Prices
The key to the real estate crisis in the United States is the stabilization of home prices and the reduction in the unemployment rate in the United States. As the unemployment rate goes down, more Americans will become employed and the delinquency rates on mortgage payments will go down. Less homes will be foreclosed upon and there will be stabilization over the long run in the real estate market.
