ARM Resets To Double 60 Day+ Delinquencies to 7.17% in 4th Quarter 2009.

WSJ story HERE reports on study by TransUnion Title Compancy. (Excerpt from Google News Search pasted below).

"The number of consumers with delinquent mortgages is poised to almost double by the end of next year, hitting its highest level in at least 16 years, according to a leading credit bureau.

TransUnion LLC, which analyzed about 27 million consumer records in its database, predicted that the proportion of consumers with mortgages that are 60 days or more past-due will hit 7.17% in the fourth quarter of 2009.

That would be the highest level reached since the Chicago credit bureau -- which is releasing the data on Tuesday -- first started tracking these statistics in 1992. It compares with an expected delinquency rate of 4.67% at the end of 2008.

The big culprit is adjustable-rate mortgages that were underwritten several years ago, when lending standards were loose.

Now, many of the initial teaser rates on these loans are expiring and resetting to higher interest rates and higher loan payments.

"There are a lot more loans that will be resetting throughout 2009 through 2011," says Ezra Becker, principal consultant in TransUnion's financial-services group, who notes that rising unemployment and depreciating home values are other contributing factors. "There may be an ongoing flow of consumers who may now be able to pay their mortgage but may not be able to a year from now."

Mortgage delinquencies are likely to peak in the first quarter of 2010 as today's new loans, which have tighter underwriting standards, take effect, he says."..