Borrowers Make Fewer Late Payments

The mortgage delinquency rate – borrowers who are late on their home loan mortgage by 60 days or more – is quickly declining, dropping to 2.72 percent in the second quarter, as indicated by another report by TransUnion. The delinquency rate has fallen 20 percent this year alone, and by about half in the past three years, when it remained at 5.39 percent in the second quarter of 2012.

Forty-eight states and all of the top 10 largest metro areas saw double-digit declines in seriously delinquent mortgages. The largest declines were in Miami (down 40 percent from 8.87 percent in the second quarter of 2014 to 5.31 percent in the second quarter of 2015) and Los Angeles (down 29.1 percent from 2.62 percent in 2014 to 2.07 percent in 2015).

"This is the lowest mortgage delinquency we've found in quite a while – down from a peak of almost 7 percent in mid 2010," says Joe Mellman, VP and leader of TransUnion's mortgage group.  "This is largely due to foreclosures and other seriously delinquent accounts continuing to work their way through the foreclosure process, as well as a reflection of the high credit quality of recent originations."

TransUnion reported  mortgage originations to subprime and near prime consumers had a year-over-year double-digit growth of 13.3 percent and 22.4 percent – a possible signal to a slight loosening of credit.

"We  believe a major reason for the increase in mortgage originations was due to falling mortgage interest rates," Mellman says. "The growth in jumbo loans for the Prime Plus and Super Prime risk tiers was another key driver. Despite this increase, it should be noted that there were 1.1 million fewer mortgage originations this past quarter compared to the pre-recession high in the third quarter of 2007."

The  average mortgage balance per consumer rose to $188,237 in the second quarter of 2015. For comparison, mortgage balances were at $186,999 at this point last year.