Economic Recovery Sends Mortgage Default Rate Lower

By Gretchen Wegrich

The primary mortgage default rate fell .10 from 1.58% to 1.48% between January and Febrtuary, reported S&P Down Jones and credit bureau Experian.

Contrastingly, the second mortgage default rate rose from 0.69% in January to .71% in February.

S&P Dow Jones managing director David Blitzer remarked, "These trends are consistent with other economic news --improvements in employment and overall economic activity and continuing gains in housing. Additionally, foreclosure activity continues to decline even though it remains at elevated levels compared to the period before the financial crisis."

Of the five cities reviewed in the index report, three reported lower February default rates. Miami saw the largest rate decrease at 24 basis points. Los Angeles followed with 18 basis points and New York with 12 basis points.

Dallas rose by seven basis points while Chicago rose just one basis points.

Miami reached the highest default rate a 3.21 while Dallas posted the lowest default rate at 1.26%. All five cities reported lower default rates than in February 2012.

Gretchen Wegrich

Gretchen Wegrich is an editor at Lender411. She specializes in mortgage basics, personal finance and green living. She graduated with a bachelor's degree in writing from University of California, San Diego and previously worked at the Santa Cruz Sentinel. Contact her at gretchen@lender411com.