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Real Estate

Serious Delinquencies Inch down

Source: https://www.corelogic.com/blog/2021/1/serious-delinquencies-inch-down.aspx

Loan Performance Insights Report Highlights: October 2020

  • The nation’s overall delinquency rate was 6.1% in October.
  • All states logged annual increases in both overall and serious delinquency rates in October.

In October 2020, 6.1% of home mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure)[1], a small decrease from September 2020, but a 2.4-percentage point increase from October 2019, according to the latest CoreLogic Loan Performance Insights Report.

The share of mortgages that were 30 to 59 days past due – considered early-stage delinquencies – was 1.4% in October 2020, down sharply from a post-pandemic high of 4.2% in April 2020 and below the year ago rate of 1.8%. The share of mortgages 60 to 89 days past due was 0.6% in October 2020, unchanged from 0.6% in October 2019 and down from 2.8% in May 2020. The drop in early and mid-stage delinquencies from the spring indicates a lower share of mortgages entering delinquency after the initial surge after the start of the pandemic in the U.S.

The serious delinquency rate – defined as 90 days or more past due, including loans in foreclosure – was 4.1% in October, more than three times that of October 2019, but down slightly from the previous two months. August’s number (4.3%) represented the highest rate since February 2014. The CARES Act provides relief to mortgage holders and has worked to keep delinquencies from progressing to foreclosure and therefore the foreclosure inventory rate – the share of mortgages in some stage of the foreclosure process – remained low at 0.3% in October 2020, down from 0.4% from October 2019.

Figure 1: Current- to 30-Day Transition Rate Dropped Back After Peaking in April

In addition to delinquency rates, CoreLogic tracks the rate at which mortgages transition from one stage of delinquency to the next, such as going from current to 30 days past due (Figure 1). The share of mortgages that transitioned from current to 30 days past due held steady at 0.8% in October 2020 – a decrease from the peak of 3.4% in April 2020. The transition rate in October was the same as the monthly average for the 12 months prior to the pandemic.

Figure 2: States With the Highest and Lowest Rate of Mortgages At Least 30 Days Past Due

Figure 2 shows the states with the highest and lowest share of mortgages 30 days or more delinquent. In October 2020, that rate was highest in Louisiana at 10% and lowest in Idaho at 3.2%. Louisiana, Mississippi and New York were in the top five a year earlier, and all U.S. states posted annual gains in their overall delinquency rate in October 2020. The states that logged the largest annual increases were Hawaii (+4.7 percentage points) and Nevada (+4.6 percentage points).

Figure 3: Percentage of Mortgages At Least 30 Days Past Due For the Ten Largest Metropolian Areas

Figure 3 shows the 30-plus-day past-due rate for October 2020 for 10 large metropolitan areas.[2] Miami had the highest rate at 10.4% and San Francisco had the lowest rate at 3.8%. Miami’s rate increased 5.6 percentage points from a year earlier. Outside of the largest 10, all but two metros recorded an increase in the overall delinquency rate. Lake Charles, Lousisiana — where Hurricane Laura hit in August — experienced the largest annual increase of 11 percentage points. Other metro areas with significant increases in the overall delinquency rate included Odessa, Texas (up 10.3 percentage points), Kahului, Hawaii (up 7.8 percentage points) and Midland, Texas (up 7.5 percentage points).

© 2021 CoreLogic, Inc. All rights reserved.

[1] Data in this report is provided by TrueStandings Servicing. https://www.corelogic.com/products/truestandings-servicing.aspx. The CARES Act provided forbearance for borrowers with federally backed mortgage loans who were economically impacted by the pandemic. Borrowers in a forbearance program who have missed a mortgage payment are included in the CoreLogic delinquency statistics, even if the loan servicer has not reported the loan as delinquent to credit repositories.

[2] Metropolitan areas used in this report are the ten most populous Metropolitan Statistical Areas. The report uses Metropolitan Divisions where available.

To learn more about the data behind this article and what CoreLogic has to offer, visit https://www.corelogic.com/.

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Founded in 1992 with the aim of accurately documenting import‐export transactions in the Americas, built and maintained by an international team, Descartes Datamyne today is a top‐ranked provider in the highly competitive US market for trade data.