Mortgage delinquencies increase for the first time in two years

TransUnion recently reported that the national mortgage delinquency rate increased for the first time since 2009, reaching 5.8 percent by the end of the third quarter of 2011.

Tim Martin, group vice president of U.S. Housing at TransUnion, said prior to the third quarter, the United States experienced six straight quarters of constant decreases in the number of borrowers 60 or more days past due on their mortgage. In fact, the organization expected the trend to continue as lenders started practicing more conservative lending policies.

"However, in the third quarter, the consumer was hit with several unanticipated shocks, including the U.S. credit rating downgrade, stock price declines, European debt concerns, stubbornly high unemployment, more downward pressure on home values and low consumer confidence," Martin said. "All of this affects a borrower's net worth and desire, or ability, to continue making house payments - especially if they are facing negative equity in their homes due to price depreciation."

However, third quarter refinance analysis from Freddie Mac found 82 percent of homeowners who were able to refinance their mortgages also strengthened their financial situation by maintaining or reducing their mortgage debt in the third quarter. Of these borrowers, 44 percent maintained the same loan amount, while 37 percent reduced their principal balance.

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