By ALEX VEIGA
LOS ANGELES (AP) â¿¿ Homeowners who took on mortgages well after the housing bubble burst are doing a better job in keeping up with payments, a trend that has helped push the national rate of late payments on home loans to the lowest level in four years.
The percentage of mortgage holders at least two months behind on their payments fell in the fourth quarter to 5.19 percent from 6.01 percent a year earlier, credit reporting agency TransUnion said Tuesday.
The rate hasn't been that low since December 2008, a time when home prices were sliding, the U.S. economy was in recession and many adjustable-rate mortgages taken out by homebuyers with less-than-perfect credit were in the process of resetting to a higher rate.Those ARM resets triggered higher payments that many borrowers couldn't afford, sending late payment rates higher into 2009. In addition, the national unemployment rate was on an upward trajectory in 2008 that would extend well into the following year. Those are some of the reasons the mortgage delinquency rate didn't hit its peak of nearly 7 percent until the fourth quarter of 2009, according to TransUnion. The rate has been trending down since then, aided by a rebound in home sales and rising home prices, which make it easier for borrowers to refinance their mortgages or sell their homes if they lose their jobs or otherwise become unable to make payments. Home loans taken out in 2008 or earlier account for 60 percent of all U.S. mortgages, and they make up 90 percent of all mortgages that are at least two months late, said Tim Martin, group vice president of U.S. housing for TransUnion. Many of those loans have gone unpaid for years, but delays in the foreclosure process, which in some states can take as long as three years, mean the mortgages remain unpaid.