CoreLogic: Delinquency Rates Lowest in More Than a Decade

CoreLogic, Irvine, Calif., said mortgage delinquency rates fell to their lowest levels since 2007 in the third quarter and foreclosure inventory rate fell to its lowest level since 2006.

The company’s monthly Loan Performance Insights Report said nationally, 4.6 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in August, down by 0.6 percentage point from a year ago (5.2 percent).

The foreclosure inventory rate fell to 0.6 percent, down from 0.9 percent a year ago. This was the lowest foreclosure inventory rate for the month of August in 11 years since August 2006, when it was 0.5 percent.

The rate for early-stage delinquencies, defined as 30-59 days past due, was 2 percent in August 2017, down slightly from 2.1 percent a year ago. The share of mortgages 60-89 days past due was 0.7 percent, unchanged from a year ago. The serious delinquency rate (90 days or more past due) declined by 0.5 percentage points year over year to 1.9 percent, the lowest level for any month since October 2007.

The report Alaska was the only state to experience a year-over-year increase in its serious delinquency rate in August. “The effect of the drop in crude oil prices since 2014 has taken a toll on mortgage loan performance in some markets,” said CoreLogic Chief Economist Frank Nothaft. “Crude oil prices this August were less than half their level three years ago. This has led to oil-related layoffs and an increase in loan delinquency rates in states like Alaska and in oil-centric metro areas like Houston.”

CoreLogic reported the share of mortgages that transitioned from current to 30-days past due was 0.9 percent in August, unchanged from a year ago. By comparison, in January 2007 just before the start of the financial crisis, the current-to-30-day transition rate was 1.2 percent and peaked in November 2008 at 2 percent.

“Serious delinquency and foreclosure rates are at their lowest levels in more than a decade, signaling the final stages of recovery in the U.S. housing market,” said Frank Martell, president and CEO of CoreLogic. “As the construction and mortgage industries move forward, there needs to be not only a ramp up in home building, but also a focus on maintaining prudent underwriting practices to avoid repeating past mistakes.”

The Mortgage Bankers Association will release its Third Quarter National Delinquency Survey this Friday, Nov. 17.

The NDS, conducted since 1953, covers 39 million loans on one- to four- unit residential properties. Loans surveyed are reported by more than 100 lenders, including mortgage bank, commercial banks and thrifts.

MBA NewsLink and MBA Servicing NewsLink will provide coverage, with commentary from MBA Vice President of Industry Analytics Marina Walsh.