TransUnion Anticipates Sharp Rise in Delinquencies

Mortgage delinquencies will not peak until early 2010 after reaching their highest level in decades, according to projections from credit reporting bureau TransUnion. TransUnion, which reported that 3.96% of home loans were 60 or more days delinquent in the third quarter, believes the 60-day delinquency rate will rise to 4.66% in the fourth quarter, up 55% from a year earlier. TransUnion projects that by the fourth quarter of next year, 7.17% of home loans will be at least 60 days past due. Ezra Becker, principal consultant in TransUnion's financial services group, told MortgageWire that lenders should expand collection efforts and add to loss reserves in response to current conditions. But he also said lenders shouldn't overlook the opportunity to make good loans to low risk customers in the current low interest rate market. "For the first time in recent memory, demand for credit outstrips the supply of credit," he said.