Mortgage delinquencies rise unexpectedly in Q3 – USATODAY.com
The rate at which mortgage holders were late with their payments by 60 days or more rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion. The credit reporting agency said 5.88% of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82% in the second quarter. The increase surprised TransUnion researchers, who had expected late payments, or delinquencies, to fall for the quarter.
The experts are surprised because delinquencies to up when housing prices go down and/or unemployment goes up. But during that quarter neither of those things happened. So why are delinquencies up, even though housing prices went up a little, and unemployment went down a little? Likely explanation: many people who are underwater on their homes, but have been dutifully paying their mortgage in the expectation that prices would head back up, are looking at the overall economy and giving up on that hope. They have decided to walk.