U.S. mortgage delinquencies edge up in Q3 – NY Fed

NEW YORK, Nov 8 (BestGrowthStock) – The number of new foreclosure
notices fell 5.5 percent but a slightly larger proportion of
mortgages became delinquent in the third quarter of 2010,
according to a New York Federal Reserve Bank survey released on
Monday.

About 2.7 percent of current mortgage balances fell into
delinquency between June and September, compared to 2.6 percent
in the second quarter, marking the first rise in this figure
since last year.

This is “a development which will bear monitoring in coming
quarters,” the New York Fed said.

About 457,000 individuals had a foreclosure notation added
to their credit reports between July 1 and Sept. 30, the Fed
said. This is a 6.4 percent drop from a year earlier.

Mortgage originations rose 4.3 percent to $380 billion but
remain about 50 percent below their average levels of
2003-2007.

Consumer indebtedness fell 0.9 percent to $11.6 trillion in
the third quarter, continuing its trend over the second quarter
but at a slower pace.

Excluding the effects of defaults and charge-offs, the New
York Fed said, non-mortgage debt fell for the first time since
at least 2000.

“Consumer debt is declining but only part of the reduction
is attributable to defaults and charge-offs,” said Donghoon
Lee, senior economist in the Research and Statistics Group at
the New York Fed.

“Americans are borrowing less and paying off more debt than
in the recent past. This change, which we continue to study
carefully, can be a result of both tightening credit standards
and voluntary changes in saving behavior.”

The New York Fed said the payoff of debt by consumers
reduced their cash flow by about $150 billion through the end
of 2009. Since its peak in the third quarter of last year,
outstanding consumer debt has dropped by nearly $1 trillion.

Total household delinquency rates fell for the second
quarter in a row. As of Sept. 30, 11.1 percent of outstanding
debt was in some stage of delinquency, compared to 11.4 percent
on June 30, the New York Fed said.

The number of new bankruptcies fell 16 percent from the
previous quarter.
(Reporting by Kristina Cooke and Richard Leong; Editing by
James Dalgleish)

U.S. mortgage delinquencies edge up in Q3 – NY Fed