During the third quarter of this year, 2.7 percent of current mortgage balances transitioned into delinquency, according to new data from the Federal Reserve Bank of New York. That’s up from 2.6 percent that became newly delinquent in the second quarter.
Fed officials called the quarterly increase “slight” but noted that the rise follows a full year of declines in new delinquencies.
The New York Fed said it observed a similar pattern in the third quarter of 2009, which might suggest this is simply a seasonal effect, but the federal bank says it plans to “closely monitor” the development.
According to the New York Fed’s report, about 457,000 individuals received home foreclosure notices on their credit reports between July 1 and September 30, 2010. Officials say this represents a 5.5 percent decrease from the second quarter and a 6.4 percent drop from a year earlier.
The Fed says consumers are continuing to trim their debt. It’s a trend that has been evident for the previous seven quarters, though the pace of decline has slowed recently. Since peaking in the third quarter of 2008, nearly $1 trillion has been shaved from outstanding consumer debts, the federal bank reports.
Excluding the effects of defaults and charge-offs, available data show that non-mortgage debt fell for the first time since at least 2000. Also, net mortgage debt paydowns, which began in 2008, reached nearly $140 billion by year-end 2009.
The Fed says “these unique findings suggest that consumers have been actively reducing their debts, and not just by defaulting…”
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