December 09, 2009
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News: TransUnion; Delinquencies to Taper Off
TransUnion, the prominent credit reporting bureau, expects mortgages and credit card delinquencies and defaults will begin to taper off in 2010. One reason is that as lenders begin to work through all of the bad credit card accounts and mortgage loan defaults that have been written off, things will begin to look better. There are some states that have been hit harder than others with the mortgage crisis which has filtered its way down to delinquent credit card accounts and will continue to experience difficulty. Five states have been hit particularly hard with Florida suffering the most with a 17 percent increase in mortgage defaults. Despite the bad news for five states, the TransUnion report indicates that 22 states will actually realize double digit increases.
Arizona was also hit very hard and the state is expected to experience a credit card and mortgage delinquency rate increase of 6.3 percent. It is also expected to be one of the few states that will see an increase in credit card delinquencies a year from now. The increase is not expected to be significant and most likely will only amount to approximately .01 percent. According to Ezra Becker, Director of Consulting and Strategy for TransUnion Financial Services Group, card delinquencies are expected to drop off as cardholders continue to reduce debt and aggressively repay current debt. Still, record breaking unemployment rates will continue to haunt the nation and put added pressure on an already weak economy.
Overall for the nation, credit card delinquencies of 90 days or more are projected to decline for the third consecutive year in 2010 at 1.04 percent compared to the expected 1.07 percent for 2009. The decline rates for 2009 and 2009 have been 11 percent and 12 percent respectively. Mortgage account that are 60 days or more delinquent is expected to decline to 6.39 percent by end of 2010 compared to the projected 6.56 percent for 2009.