GOOD NEWS: MORTGAGE DELINQUENCIES DECLINING

There was a recent article in the Wallstreet Journal that mortgage delinquencies fell in March for the second month in a row, according to new data.

The number of mortgage loans that were at least 30 days past due or in foreclosure declined 8.6% in March, according to LPS Applied Analytics, which tracks loan performance. The biggest slide came in loans that were 30 days past due. Such loans fell by a record 342,000 to roughly 1.45 million, a level not seen since spring 2008.

While the number of bank-owned homes rose, the total number of loans that are delinquent or in foreclosure has fallen by more than 647,000 since January, according to LPS. The estimates include loans that carry government backing, those packaged into securities or held by banks.

"We're not out of the woods, but this appears to be a turning point," said LPS Applied Analytics President Ted Jadlos. "This is the first time we've seen improvement across all stages of mortgage delinquency." Still, he said, "we still have a long way to go."

The drop in troubled loans comes amid other signs of improving consumer credit. The portion of credit cards that were at least 60 days past due fell to 2.67% on a seasonally adjusted basis at the end of March from 2.86% at the end of December, according to Equifax Inc. and Moody's Economy.com. Delinquencies also fell for auto and other consumer loans.

There is still plenty of pain left in the mortgage sector. More than 320,000 loans that started the year current were at least 60 days past due at the end of March, according to LPS. More than 3.6 million homes will be lost from 2010 to 2012 because borrowers can't make their loan payments, Moody's Economy.com estimates.

Among other reasons for caution, mortgage delinquencies typically fall in February and March as borrowers get their tax refunds, said Lou Tisler, executive director of Neighborhood Housing Services of Greater Cleveland, which works with financially troubled homeowners. In the Cleveland area, foreclosure filings are on pace to equal the highs of 2008.

The number of borrowers seeking aid also continues to rise. At Consumer Credit Counseling Service of Greater Atlanta, foreclosure-prevention counseling sessions were up 4.7% through March compared with a year earlier. "We're probably seeing, at mortgage-counseling programs across the country, 5,000 to 7,000 new people a week," says Douglas Robinson, a spokesman for NeighborWorks America, which administers the government's national foreclosure-mitigation-counseling program.

Some borrowers are being helped by the Obama administration's foreclosure-prevention program and other modification efforts. Irma Bravo, the owner of a cleaning service in San Diego, recently received a loan workout that lowers the monthly payment on her $522,000 mortgage to $1,736 from nearly $5,000.

"It's a big, big relief," Ms. Bravo says.

Through March, more than 230,000 borrowers have received permanent modifications through the government program, according to the Treasury Department. It isn't clear how many borrowers will remain current once their loan is modified.

But getting a loan workout remains difficult. "There are still a huge number of cases in the pipeline or on hold," said Gabe del Rio, a senior vice president with Community HousingWorks in San Diego, which counsels borrowers facing foreclosure.