The rate of mortgage delinquency may have peaked, according to data provided by an Equifax executive to Reuters on Thursday.
Of homeowners with mortgages, 7.01 percent were at least 30 days late on their loans last month, up a staggering 58.4 percent from a year ago, but just 1.3 percent from April; a year ago the delinquency rate was 4.42 percent.
Dann Adams, president of U.S. Information Systems for Equifax, said the next three months will determine if mortgage lates have really bottomed out, with unemployment data a key indicator.
U.S. unemployment hit a 26-year high last month, reaching 9.3 percent even as the pace of job losses slowed, hinting at possible stabilization in that department.
That, coupled with the fact that new mortgages are being written much more prudently, could drag down the delinquency rate going forward.
Though Adam’s comment that “there is not a mortgage in the U.S. being underwritten without verification of income and employment” seemed a bit shortsighted at best.
It’s also important to note that various foreclosure moratoria have had an impact on the numbers, so they must be taken with a big grain of salt.