Seriously Delinquent Home Mortgages Rise Again In Connecticut

Connecticut residential borrowers who were behind on their monthly payments eased slightly in the final three months of last year, but those who were in the most serious trouble crept up again, according to a new report today.

Borrowers who were seriously delinquent –  90 days or more past due or in foreclosure — rose to nearly 8 percent of all loans serviced,  higher than the nation and the third highest in New England, according to the report from the Mortgage Bankers Association.

Experts said today that the $25 billion settlement announced last week with the nation’s five largest servicers could ease the court backlog of seriously delinquent mortgages which grew following 2010′s robo-signing scandal. The scandal shed light on shoddy foreclosure practices.

The settlement set clear guidelines for foreclosures, but it is unclear how soon it will affect the system.

“I would think that would speed up the process and get things cleaned up,”  Robert Porter, associate professor of finance, at Quinnipiac University in Hamden, said. “More foreclosures will get resolved.”

Seriously delinquent mortgages in Connecticut accounted for 7.98 percent of all loans serviced at Dec. 31, up from 7.85 percent three months earlier. In New England, only Maine and Rhode Island were higher, according to the report.

Even though Connecticut saw an increase in seriously delinquent mortgages at the end of last year, the tally is still below the record high of 8.13 percent in the first quarter of 2010.

There was a bit of good news in the report for Connecticut: total past due loans were 7.49 percent in the last three months of 2011, compared with 7.52 percent three months earlier.

Even if foreclosures are resolved quicker, Thursday’s report shows that the pipeline in Connecticut may not yet be slowing as unemployment remains high. The association found that the percentage of  Connecticut mortgages that were 30- and 60-days behind in the last three months of 2011 rose compared with the previous three months.