IRVINE, Calif.– In August, 6.6% of mortgages were delinquent by at least 30 days or more, including those in foreclosure, a 2.9-percentage point increase in the overall delinquency rate compared with August 2019, according to the latest CoreLogic Loan Performance Insights report.
According to CoreLogic, measuring early-stage delinquency rates is important for analyzing the health of the mortgage market and to comprehensively monitor mortgage performance, it examines all stages of delinquency as well as transition rates that indicate the percent of mortgages moving from one stage of delinquency to the next.
CoreLogic noted foreclosure rates remain low, in part due to forbearance programs and other government provisions.
“However, August 2020 marked a spike in 150-day past-due loans, reaching a historic high of 1.2%, likely due to large volumes of delinquencies moving in tandem through the pipeline,” CoreLogic said. “Homeowners nearing the end of the first 180-day grace period (afforded to borrowers with federally backed mortgages) can request an extension of an additional 180 days, which is keeping foreclosure rates low while serious delinquency continues to climb.
“However, back-mortgage payments continue to add up for those unable to exit forbearance periods early,” the analysis continued. “Looming unpaid mortgage payments, paired with sharp declines in income for many families, point to a potential wave of home sales triggered by financial distress in 2021 as forbearance periods end.”
Loan Performance - National
According to CoreLogic’s analysis, the nation's overall delinquency rate for August was 6.6%. The rate for early-stage delinquencies – defined as 30 to 59 days past due – was 1.6% in August 2020, down from 1.8% in August 2019. The share of mortgages 60 to 89 days past due was 0.8%, up from 0.6% in August 2019, CoreLogic said.
The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 4.3%, up from 1.3% in August 2019. “This is the highest serious delinquency rate since February 2014,” the company said, adding that as of August 2020, the foreclosure inventory rate was 0.3%, down from 0.4% in August 2019.
Transition Rates - National
The CoreLogic report found the share of mortgages that transitioned from current to 30-days past due was 0.9%, up from 0.8% in August 2019. The transition rate has slowed since April 2020 — when it peaked at 3.4%.
Serious Delinquency - State
According to CoreLogic, in August serious delinquency, defined as 90 days or more past due including loans in foreclosure, in every state logged an annual increase in overall delinquency rates. Popular tourism destinations again showed the highest increases, with Nevada (up 5.3 percentage points), Hawaii (up 4.9 percentage points), New Jersey (up 4.6 percentage points), Florida (up 4.5 percentage points) and New York (up 4.4 percentage points) topping the list for gains, it reported.
Serious Delinquency – Metropolitan Areas
CoreLogic said it found there were 383 metropolitan areas where the Serious Delinquency Rate, defined as 90 days or more past due, increased in August. Odessa, Texas — which has been hard hit by job loss in the oil and gas industry — again experienced the largest annual increase of 10.1 percentage points. Other metro areas with significant serious delinquency increases included Midland, Texas (up 7.9 percentage points); Kahului, Hawaii (up 7.6 percentage points) and Miami (up 7.0 percentage points), CoreLogic said.
Dubuque, Iowa, was the only metro area to experience an annual decline in overall delinquency rate at -1.5%, CoreLogic said.
For more info: www.corelogic.com/insights.