Reports Show Declines in Mortgage Defaults

Two reports examining trends in serious delinquencies — home loans on which borrowers are at least 60 days behind on payments — may finally be starting to decline.

A report from the credit data firm TransUnion said such delinquencies fell slightly across the nation in the first quarter of 2010 — the first such decline in three years. The rate was 6.77% of all home loans, down from 6.89% in the fourth quarter of last year.

A separate report from the Fitch Inc. ratings firm said serious delinquencies on subprime loans backing mortgage bonds fell for the second month in a row, thanks to more loan modifications and also to borrowers who caught up on payments on their own. The rate was still sky high — 45.2% of all subprime loans, down from 46.3% in March.

Fitch said delinquencies fell for the first time in four years on alt-A loans. These mortgages were made to people with decent credit histories who weren’t considered the highest quality, or prime, borrowers because of such factors as lack of full income documentation.

Mark Zandi, chief economist of Moody’s Analytics, said in an interview that many of the worst loans have been cleared out and that mortgages written over the last three years — with far higher standards and at far lower home prices — are holding up better.