Consumers with home equity loans or lines of credit saw increased mortgage delinquency throughout the recession, according to a new study from TransUnion.
In March 2006, the national 30-60 mortgage roll rate was 12.56% for borrowers with home equity loans/lines and 17.16% for those without. However, by March 2009 the 30-60 roll rate had skyrocketed to 26.55% for borrowers with home equity loans/lines, while increasing to only 22.66% for those borrowers without.
The number of consumers “rolling” their delinquency status on mortgage payments from 30- to 60 and 60- to 90 days past due peaked in July 2009.
Approximately 24.4% of consumers who were 30 days past due on their mortgage payments in June 2009 became 60 days past due in July 2009, and nearly 37.6% of consumers 60 days delinquent on their mortgage payments became 90 days late in that same time.
The study confirmed previous findings that mortgage delinquency roll rates were correlated to falling housing prices and rising unemployment over the course of the recession.
Median existing home prices decreased 18.1% (from $207,700 to $170,200) from 12/2007 through 06/2009, while 30-60 and 60-90 mortgage roll rates increased 42.4% and 29.6%.
The national 30-60 mortgage roll rate had been 17.12% in December 2007 and moved up to 24.38% by June 2009. The 60-90 mortgage roll rate increased from 29% to 37.59% in that same time frame.
An interesting dynamic was also found in early-stage roll rates in California. Current-30 roll rates in that state remained well below the national average throughout the course of the study, but roll rates from 30 days past due and onward were significantly worse in California than for the nation.
For example, in 12/2007, 0.58% of current accounts rolled to 30 days past due in California while for the nation at large it was 0.79%. Yet the 30 to 60 roll rate in California that same month was 27.15%, while the national average 30-60 roll rate was only 17.12%.
“Serious mortgage delinquency in California is among the highest in the nation, at nearly twice the national average,” said FJ Guarrera, vice president in TransUnion’s financial services business unit.
“We therefore did not expect the rate of accounts rolling from current payment status to 30 days past due in California to be lower than the national average. This means that Californians are actually less likely to enter delinquency with their mortgages, but once they do they are more likely to fall into severe delinquency.”
