NEW YORK - November 17, 2009 - The pace at which people fell behind on their mortgages slowed during the summer for the third consecutive quarter, but the overall delinquency rate hit another record, a new report shows.

For the three months ended September 30, 6.25% of U.S. mortgage loans were 60 or more days past due, according to credit reporting agency Trans Union. That's up 58% from 3.96% a year ago.

Being two months behind is considered a first step toward foreclosure, because it's so hard to catch up with payments at that point.

The rate was up 7.6% from the second quarter. That's a much smaller jump than the 11.3% rise in the second quarter from the first, and the 14% leap seen in the quarter before that.

While the slowing growth rate is a positive sign, the increase shows there are still a lot of problematic mortgages out there, said F.J. Guarrera, vice president of Trans Union's financial services division. The company doesn't expect the figure to start declining until the middle of 2010.

He said two things must get better before mortgage delinquency rates start reversing themselves: home values and unemployment. "Until we see improvement in both of those areas, it's possible that it will take longer for delinquency to improve," said Guarrera.

The statistics, which are culled from Trans Union's database of 27 million consumer records, show that mortgage delinquencies remain highest in the four states where the crisis has hit the worst.

• In Nevada, the rate reached 14.5%, up from 7.7% a year ago.
• In Florida, the rate was 13.3%, up from 7.8% last year.
• In Arizona, the rate hit 10.4%, up from 5.5% in 2008.
• In Kalifornia, the rate jumped to 10.2%, from 5.8% last year.

North Dakota remained the state where mortgage holders most often paid on time, with just 1.7% delinquency, up from 1.4% last year.

Trans Union expects the number of delinquencies to rise to just short of 7% for the fourth quarter, compared with 4.6% for the 2008 fourth quarter. The rate may reach 16% in Nevada. Those states with the highest delinquency and foreclosure rates will likely continue to see depressed housing prices.