Early-Stage Mortgage Delinquencies Up Following Active Hurricane Season
Six months after devastating hurricanes hit Texas, Florida and Puerto Rico, homeowners, mortgage lenders and servicers continue to feel residual effects.
CoreLogic, Irvine, Calif., said while overall mortgage delinquencies and foreclosures fell in the third quarter, early stage delinquencies rose slightly. The company’s Loan Performance Insights Report said 5.1 percent of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in October, an 0.1 percentage point year-over-year decline from a year ago.
The foreclosure inventory rate fell to 0.6 percent, down 0.2 percentage points from 0.8 percent a year ago. The foreclosure inventory rate has held steady at 0.6 percent since August, the lowest level since June 2007, when it was also at 0.6 percent.
CoreLogic said early-stage delinquencies, defined as 30-59 days past due, fell to 2.3 percent in October 2017, down 0.1 percentage points from 2.4 percent in September but up 0.1 percentage points from 2.2 percent a year ago. The share of mortgages that were 60-89 days past due in October rose to 0.9 percent, up 0.2 percentage points from 0.7 percent in both September and year ago. The serious delinquency rate, reflecting loans 90 days or more past due, was 1.9 percent, unchanged from September and down 0.4 percentage points from 2.3 percent in October 2016. The 1.9 percent serious delinquency rate in June, July, August, September and October of this year marks the lowest level for any month since it was also 1.9 percent in October 2007.
“The temporary rise in September’s early-stage delinquencies reflected the impact of the hurricanes in Texas, Florida and Puerto Rico, but now the impact from the hurricanes is fading from a national perspective,” said Frank Nothaft, chief economist for CoreLogic.
Nothaft noted while the national impact is waning, local impact remains. He said some Florida markets continue to see increases in early-stage delinquency transition rates in October, reaching 5 percent, on average, in Miami, Orlando, Tampa, Naples and Cape Coral. Texas markets such as Houston, Beaumont, Victoria and Corpus Christie peaked above 7 percent in September, “but are on the mend and improving in October.”
The report said the share of mortgages that transitioned from current to 30 days past due was 1.1 percent in October 2017, down from 1.3 percent in September 2017 and up from 1 percent in October 2016. 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 it peaked in November 2008 at 2 percent.
“While the national impact of the recent hurricanes will soon fade, the human impact will remain for years. For example, the displacement and rebuilding in New Orleans after Hurricane Katrina extended for several years and altered the character of the city, an impact that still remains today,” said Frank Martell, president and CEO of CoreLogic. “The reconstruction of the housing stock and infrastructure impacted by the storms should provide a small stimulus to local economies. This rebuilding will occur against a backdrop of wage growth, consumer confidence and spending in the national economy which should continue to provide a solid foundation for real estate demand in the storm-impacted areas and beyond.”
