New Data on Mortgage Delinquencies Is Released

By CUToday.info11.06.2017

New data show 4.6% of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in July 2017, a 0.9% percentage point year-over-year decline in the overall delinquency rate compared with July 2016 when it was 5.5%, according to the Loan Performance Insights Report from CoreLogic.

As of July 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.7%, down from 0.9% in July 2016 and the lowest since the rate was also 0.7% in July 2007.

Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market, the company said. To monitor mortgage performance comprehensively, CoreLogic examines all stages of delinquency as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.

The rate for early stage delinquencies, defined as 30-59 days past due, was 2% in July 2017, down slightly from 2.3% in July 2016, according to the CoreLogic report. The share of mortgages that were 60-89 days past due in July 2017 was 0.7%, unchanged from July 2016. The serious delinquency rate (90 days or more past due) declined from 2.5% in July 2016 to 1.9% in July 2017 and remains near the 10-year low of 1.7% reached in July 2007. Alaska was the only state to experience a year-over-year increase in its serious delinquency rate.

“While the U.S. foreclosure rate remains at a 10-year low as of July, the rate across the 100 largest metro areas varies from 0.1% in Denver to 2.2% in New York,” said Dr. Frank Nothaft, chief economist for CoreLogic, in a statement. “Likewise, the national serious delinquency rate remains at 1.9%, unchanged from June, and when analyzed across the 100 largest metros, rates vary from 0.6% in Denver to 4.1% in New York.”

Since early-stage delinquencies can be volatile, CoreLogic also analyzes transition rates. The share of mortgages that transitioned from current to 30-days past due was 0.9% in July 2017, down from 1.1% in July 2016. By comparison, in January 2007 just before the start of the financial crisis, the current-to-30-day transition rate was 1.2% and it peaked in November 2008 at 2%.

“Even though delinquency rates are lower in most markets compared with a year ago, there are some worrying trends,” said Frank Martell, president and CEO of CoreLogic, in a statement. “For example, markets affected by the decline in oil production or anemic job creation have seen an increase in defaults. We see this in markets such as Anchorage, Baton Rouge and Lafayette, Louisiana where the serious delinquency rate rose over the last year.”

Reprinted with permission from CUToday.info, a leading source of news and resources for credit union decision-makers.