Home borrower delinquencies may drop in 2010, study says

By Paul Donsky

The Atlanta Journal-Constitution

The percentage of Georgia mortgage holders late on their payments may start dropping next year, according to a study released Tuesday by TransUnion, one of the nation’s largest consumer credit rating firms.

TransUnion estimates that the proportion of Georgia borrowers at least 60 days late on their house payments will drop from 7.37 percent at the end of this year to 6.68 percent at the end of 2010.

That would mark the first dip in Georgia’s mortgage delinquency rate since the housing crisis erupted more than two years ago.

“We do believe things will begin to improve; however, it will take some time,” said FJ Guarrera, vice president with TransUnion’s financial services group.

The report said Georgia’s delinquency rate should recover at a faster rate than the nation's, though it will remain slightly higher than the U.S. average.

In the third quarter of this year, Georgia had the fifth-highest delinquency rate in the country, according to the TransUnion study, trailing only Nevada, Florida, Arizona and California. TransUnion believes Florida’s delinquency rate, now 13 percent, will rise next year to 17 percent.

TransUnion analyzed 27 million consumer records as well as economic data such as unemployment, housing values and savings data to come up with its projections.

Richard Martin, a real estate professor at the University of Georgia's Terry College of Business, isn't so sure about improvement next year.

“I think the market is at the bottom, but I don’t see any real signs of improvement yet,” said Martin. "I’m just worried about the old-fashioned economic distress now – people losing their jobs and can’t pay their mortgages,” he said. “I’m still wait-and-see on this whole thing.”

TransUnion’s report predicted metro Atlanta’s mortgage delinquency rate will rise in the fourth quarter to 8.01 percent, compared to 7.43 percent in the third quarter. The report did not include projections of Atlanta’s delinquency rates for the next year.

The report also included data and projections on credit card delinquencies. The percentage of Georgians at least 90 days late on their credit card payments is expected to bounce around next year but end 2010 at 1.18 percent, down from 1.23 percent in the third quarter of this year.

Last month, the Mortgage Bankers Association issued its own study, showing 16 percent of Georgia mortgage holders 30 or more days past due on payments, or in foreclosure. The state had the sixth-highest delinquency rate in that survey.