SoCal Mortgage Blog

Household_Debt_Credit_Q12011.pdf

Mortgage delinquency rates declined for the fifth consecutive quarter in 2011Q1. As of March 31, 10.5% of outstanding debt was in some stage of delinquency, compared to 10.8% on December 31, 2010 and 11.9% a year ago. About $1.2 trillion of consumer debt remains delinquent and $890 billion is seriously delinquent (at least 90 days late or “severely derogatory”). Compared to a year ago, both delinquent and seriously delinquent balances have fallen 15%.

About 368,000 individuals had a foreclosure notation added to their credit reports between December 31 and March 31, a 17.7% decrease from the 2010Q4 level of new foreclosures. New bankruptcies noted on credit reports fell 13.3% during the quarter, from 500,000 to 434,000. New bankruptcies in 2011Q1 were 6.4% below their levels of 2010Q1.

Mortgage originations during 2011Q1 continued to increase for a third consecutive quarter, to $499 billion. While mortgage originations in 2011Q1 were 65% above their 2008Q4 trough and 31% above their level of a year ago, they remain 34% below their average levels of 2003-2007. Auto loan originations fell back in the quarter, to $63 billion, but remain more than 25% above their trough level of 2009Q1. Still, auto loan origination balances are also well below their levels of 2003-2007.

About 2.4% of current mortgage balances transitioned into delinquency during 2011Q1, the second straight quarterly improvement in this measure. The rate of transition from early (30-60 days) into serious (90 days or more) delinquency continued its trend of slow improvement, as it fell from 30% to 28%, the lowest rate for this measure since 2007Q3. This improvement was accompanied by a higher cure rate with the transition rate from early delinquency to “current” increasing in the quarter.

While many of the national trends described here are present in most areas of the country, the data for selected states indicate substantial heterogeneity. For example, data for Arizona, California, Florida and Nevada continue to indicate higher than average delinquency and foreclosure rates, but these rates are falling faster on average than in the rest of the country. The accompanying charts provide graphic representations of the national data and, for selected series, the underlying geographic variation.