Slight Drop In Q4 Last Year Continues Downward Trend
Kenneth R. Gosselin
February 17, 2011
Home sales in Connecticut fizzled at the end of 2010, but there were renewed signs that the state's foreclosure troubles may be easing.
The number of Connecticut homeowners seriously delinquent on their mortgage payments or in foreclosure declined in the fourth quarter of last year — the third quarterly drop in a row, according to a report Thursday by the Mortgage Bankers Association.
In Connecticut, foreclosures and mortgages 90 days or more past due declined to 7.53 percent of all first mortgages in the fourth quarter of 2010, or 38,962 troubled loans, down slightly from 7.56 percent in the previous quarter, according to the quarterly report, which tracks individual states as part of a nationwide survey.
The number of mortgages is not the same as the number of houses because a house can have more than one mortgage.
In the first three months of last year, the level of the most troubled loans in Connecticut reached a record high of 8.13 percent.
The decline in the most recent quarter was notable because delinquencies tend to peak for the year in the fourth quarter as homeowners often choose paying the heating bill over the mortgage. That decline was mirrored nationally, the survey found.
One in 13 mortgages in the state were 90 days past due or in foreclosure in the fourth quarter. That compares with one in 12 for the nation as a whole.
While the decline in the seriously delinquent loans is encouraging, the number of loans falling into delinquency or 30 days behind in payments crept up again in the fourth quarter — indicating that household budgets may still be under pressure and that another wave of trouble could be on the way.
Job growth in Connecticut remains sluggish and unemployment stands at 9 percent.
The increase in mortgages that were 30 days or more past due ran counter to the nation, which saw a sharp drop in those delinquencies, down to levels prior to the recent recession.
Jay Brinkmann, the association's chief economist, said some of the improvement nationally may be coming because lending standards tightened after 2007 and are resulting in mortgages that borrowers can afford. Borrowers typically tend to default within three years after loan approvals, he said.
"We would expect a continued drop barring any significant change in the economy," Brinkmann said.
Reprinted with permission of the Hartford Courant.
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