Home / Daily Dose / Mortgage Delinquency Rate Declines for 12th Straight Quarter Delinquent Mortgages Mortgage Delinquency Rate TransUnion 2015-02-18 Brian Honea Sign up for DS News Daily Related Articles The Best Markets For Residential Property Investors 2 days ago Brian Honea’s writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master’s degree from Amberton University in Garland. The Week Ahead: Nearing the Forbearance Exit 2 days ago Print This Post Data Provider Black Knight to Acquire Top of Mind 2 days ago Tagged with: Delinquent Mortgages Mortgage Delinquency Rate TransUnion Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago The nation’s mortgage delinquency rate for loans 60 days or more overdue continued its steady decline in the fourth quarter of 2014, falling to 3.29 percent – representing a 14 percent drop from the same quarter in 2013 (3.84 percent), according to TransUnion’s latest mortgage report released Wednesday.Q4 was the 12th straight quarter in which the mortgage delinquency rate declined, according to TransUnion.”The mortgage delinquency rate continues to be well controlled as it slowly recedes to pre-recession levels, driven primarily by the ongoing clearance of the foreclosure backlog. More recent vintages have been performing exceptionally well,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. “A bigger story this past quarter is the continued rise in mortgage balances. Much of this gain can be attributed to those consumers who took advantage of a low interest rate environment to purchase homes with jumbo mortgage loans. The share of these loans amongst all mortgage originations increased by 8% in Q3 2014 from 6.8% in Q3 2013 and 5.8% in Q3 2012.”Miami experienced the largest year-over-year decline in delinquency rate among metro areas with a drop from 10.4 percent in Q4 2013 down to 7.18 percent in Q4 2014 (a decline of 30.9 percent). Two more major metro areas that experienced year-over-year double digit declines in delinquency rate in Q4 were Los Angeles (from 3.06 percent to 2.4 percent, a 21.5 percent decline) and Boston (from 3.08 percent down to 2.69 percent, a decline of 12.8 percent).”These are significant data points, because they show that mortgage delinquency rates continue to drop across the country—both in those markets with elevated delinquencies and in those that have already experienced major drops,” Becker said.The age group that saw the largest year-over-year decline in mortgage delinquency rate in Q4 was the age 30 and under group, which saw a 2.92 percent rate in Q4 2013 fall down to 2.21 percent in Q4 2014, a drop of 24.3 percent. But while delinquency rates dropped year-over-year for all age groups, debt levels increased. The under-30 group of consumers saw a the largest debt-to-borrower increase, from $149,778 in Q4 2013 up to $151,692 in Q4 2014, according to TransUnion.There were 53.2 million mortgage accounts nationwide as of the end of Q4 2014, according to TransUnion – a slight increase from 52.9 million in the same quarter in 2013. However, Q4 2014’s total was more than six million fewer than the same quarter in 2009 (59.6 million). Demand Propels Home Prices Upward 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago in Daily Dose, Featured, Market Studies, News Mortgage Delinquency Rate Declines for 12th Straight Quarter Demand Propels Home Prices Upward 2 days ago Subscribe Previous: Bank of America Provides Nearly $9 Million in Consumer Relief Toward Settlement Obligation Next: Freddie Mac to Announce Q4, Full Year 2014 Financial Results Thursday Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Share Save About Author: Brian Honea February 18, 2015 1,200 Views
Mercer and Aon Hewitt have suggested the European Central Bank’s (ECB) programme for monetary easing through the large-scale purchase of government bonds is to blame for Dutch pension schemes’ funding decreases in March. Both consultancies estimated that the coverage ratio of Dutch pension funds fell to 104% on average over the month, with Aon Hewitt reporting a 2-percentage-point drop.Dutch schemes’ ‘policy funding’, based on the 12-month average of current coverage, fell to 108% on average.Aon Hewitt noted that current funding had fallen below the required minimum of 105% and attributed the decrease largely to the ECB’s quantitative easing (QE) programme. It said the drop of interest rates in March increased Dutch pension funds’ liabilities by 7.1% in March.Mercer concluded that, on balance, the coverage ratio had fallen by 3 percentage points since the ECB initiated QE on 9 March.The consultancy pointed out that the 30-year swap rate had dropped 46 basis points to 0.8% over this period, causing liabilities to increase by 6.3% for the average pension fund.However, this was, in part, offset by returns as a result of the interest hedge on liabilities, it added.For the first quarter, Mercer said the 30-year swap rate had decreased from 1.46% to 0.8%, leading to a 9% increase in liabilities.However, the negative impact of this was mitigated by a combination of interest hedges, rising equity markets and a drop in the euro relative to other main currencies.This was a benefit to pension funds with no currency hedges, or limited ones, according to Dennis van Ek, actuary at Mercer.He attributed the drop in policy funding to the relatively high coverage of the first quarter of 2014, which is gradually disappearing from the 12-month average and being replaced by the relatively lower funding of the past three months.Aon Hewitt estimated that policy coverage – now the criterion for indexation and rights cuts – dropped by 1 percentage point in March to 108%.This is 2 percentage points short of the level where pension funds can start granting inflation compensation.Frank Driessen, chief commercial officer for retirement and financial management at Aon Hewitt, concluded that the prospects for indexation would decline further in the coming years.“As the current coverage ratio has been lower than the policy funding for quite a while, the latter is to decrease further,” he said.“As a consequence of the low interest rates, many pension funds must submit a recovery plan with supervisor DNB before 1 June.” Mercer’s Van Ek also noted that the current coverage without the application of the ultimate forward rate (UFR) was 95%.This is equal to the average funding at the start of the financial crisis in 2008, when pension funds had no obligation to use the UFR for discounting liabilities.Earlier in that year, before equity markets collapsed, Dutch schemes’ funding stood at 144% on average.