Mortgage delinquencies retreat to pre-pandemic levels

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CoreLogic latest loan performance report, measuring data from July 2021, found that 4.2% of all mortgages in the United States were in some stage of default, representing a 2.3 percentage point drop in default from July 2020, when it was 6.5%. While overall delinquency remains above the pre-February 2020 pandemic rate of 3.6%, it is the lowest rate since last March.

The study defines delinquency as mortgages that are 30 days or more past due, including those in foreclosure.

As of July 2021, the delinquency and transition rates in the United States, as well as their year-to-year variations, were as follows:

  • Early delinquencies (30 to 59 days late):1%, compared to 1.5% in July 2020.
  • Unwanted delinquency (60 to 89 days late):3%, compared to 1% in July 2020.
  • Serious delinquency (90 days or more past due, including foreclosed loans):8%, against 4.1% in July 2020. Although still high, this is the lowest serious delinquency rate since May 2020.
  • Foreclosure Inventory Rate (the share of mortgages at a certain stage of the foreclosure process):2%, up from 0.3% in July 2020. This is the lowest foreclosure rate recorded since CoreLogic started logging data (1999).
  • Transition rate (the share of mortgages that went from a current loan to a 30-day delay):6%, compared to 0.8% in July 2020.

“The decline in delinquency levels is an encouraging sign of economic improvement and the sustainability of the housing market,” said Franck Martell, President and CEO of CoreLogic. “In anticipation of the end of many forbearance and assistance programs, many supported borrowers must consider their financial options, including a potential loan modification, to ensure they stay up to date. and avoid foreclosures. “

According to the latest estimate from the Mortgage Bankers Association (MBA), around 1.3 million homeowners are currently on a forbearance plan.

As we continue to see an improvement in serious delinquency, around one million people across the country have been unable to make payment for at least six months, said the CoreLogic report. The share of borrowers in arrears for six months or more was about half of total defaults in July, with many still relying on options such as forbearance, loan modifications and others. government provisions to avoid foreclosure.

In July, all of the U.S. states saw a decline in overall annual delinquency rates, New Jersey (down 3.9 percentage points), Florida (down 3.5 percentage points) and Nevada ( down 3.3 percentage points) at the top with the largest declines.

“Even though loan modification or income collection may not help delinquent homeowners become and stay up to date with their payments, the double-digit rise in home prices can help them avoid a troubled sale,” said Dr Frank Nothaft, Chief Economist at CoreLogic. “Homeowners with significant equity in their home are much less likely to experience a foreclosure sale, and luckily the CoreLogic Home Equity Report found that the average homeowner had earned $ 51,500 in equity over the past year, a five-fold annual increase.

CoreLogic found that all US subways also saw an annual drop in overall delinquency rates in July, with Miami (down 5.4 percentage points), Laredo, Texas (down 5.1 percentage points) and Kingston, New York (down five percentage points) posting the largest declines. Nevertheless, high overall delinquency rates persist in some metropolitan areas, notably Odessa, Texas (11%); Pine Bluff, Arkansas (10.6%); and Laredo, Texas (10.5%).


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