O.C. mortgage delinquency jumps again

July 2nd, 2009, 3:00 am · 8 Comments · posted by Mathew Padilla

TransUnion reports 6.7% of Orange County homeowners with mortgages were at least two months behind on payments in March, up from 5.3% in December and more than double the rate a year earlier.

Orange County’s bad debt rate topped the U.S. — which had a 5.2% rate — for the fourth straight quarter. California’s rate was higher, however, at 8.4%, up from 6.9% in December and 4.3% a year ago.

I previously blogged the county’s 90-day credit card delinquency ratio hit 1.4% in March.

Just more signs consumers are hurting from the recession and housing downturn. TransUnion’s Keith Carson, a senior consultant in its financial services group, predicts a national 7% delinquency rate by year end:

“Credit performance generally lags economic conditions. Thus although there have been some pockets of promising news on the economic front, we see unemployment and deflated housing prices continuing to pushing up delinquency rates through the remainder of this year. At this juncture it is difficult to predict with any certainty what impact, if any, the various government initiatives will have on the mortgage delinquency.”

I’m guessing government programs help a small portion of troubled borrowers, and mostly delay foreclosures, thus delaying a housing recovery.

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Tom M says:

July 2, 2009 at 10:45 am

O.C. mortgage delinquency jumps again. I guess the RE agents will tell you this is a sign that the market is getting stronger.

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Larry P. says:

July 2, 2009 at 11:01 am

Delinquencies RISE??? This is SHOCKING! I have heard rumors and whispers that if people don’t have jobs and therefore no IN-COME, it is difficult to pay bills on time. I am no financial guru (though I did stay in a Holiday Inn Express last night) but my carefully developed theory is that…follow closely here….as incomes fall and jobs disappear…..here it comes….wait for it….wait for it….DELINQUENCIES WILL RISE!!! There it is. In fact I am going to go out on a LIMB here and BOLDLY predict that as unemployment stays high, delinquencies will AS WELL! there you have it. I have just saved you the trouble of reporting it when it happens again and again in coming months as if it were like a bolt from the blue.

Sarcasm off.

Sorry Matthew, I know you have to write something but is this kind of thing really newsworthy at this point? I mean, Delinquencies rising should be a given right now and only newsworthy when they DROP in the face of a rising Unemployment rate.

Scott says:

July 3, 2009 at 11:56 pm

Wow — 1 in every 16 homes in Orange County with mortgages is heading towards foreclosure — that’s a huge number!

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sharpster says:

July 2, 2009 at 5:16 pm

Larry P, you do realize that if Matt or the Register didn’t write this, someone out there would accuse them of hiding the truth.

But besides all that, you know Matt, all I want to know is…. where are those foreclosures?? I mean the market should be flooded with foreclosures by now. What gives…

July 2, 2009 at 6:03 pm

Here is the OC RE “Professional” who will now tell you everything is fine.
Go ahead Mr Sharpster take it away and let us know how we can join the thousands of happy homeowners out there.

July 3, 2009 at 7:57 am

Tom, there are thousands of happy homeowners out there? That is a fact, you disagree with that?? Please don’t tell me you disagree with that, because it makes you look really, really and I mean really dumb. But I would never tell you whether or not you should join them.

snarf says:

July 3, 2009 at 9:13 am

If you make over 50K a year and you lose your job now, you’re toast if you have a big mortgage payment and/or lots of debt. If you’re not in a specialized, in demand field, you might as well wrap up the tent and plan for relocation to the Midwest or Texas if you want to find employment; if you stay in Southern California get ready for a new lifestyle. There are few well paying jobs available; people are lining up for $10 an hour.

Liar Loan says:

July 6, 2009 at 12:06 pm

Delayed Foreclosures = Higher Delinquency

This is nothing more than a math game. Since loans aren’t moving from the delinquency bucket to the foreclosure bucket due to moratoriums, loan mods, bankruptcies, etc., you have delinquencies rising and foreclosure inventory falling (See Matt’s previous post on the decline in distressed inventory in OC).

The delinquency percentage will drop only when they decide to stop delaying foreclosures for those that cannot pay.

Orange County Register