Declining Mortgage Delinquency Rates as Hurricane-Impacted States Show Improvement

CoreLogic, Irvine, Calif., said mortgage delinquencies continued to decline in April, with only states affected by 2017 hurricanes lagging.

The company’s monthly Loan Performance Insights Report said nationally, 4.2 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in April, an 0.6 percentage point decline from a year ago, when it was 4.8 percent.

The report said the foreclosure inventory rate fell to 0.6 percent, down 0.1 percentage points from 0.7 percent a year ago. Since last August, the foreclosure inventory rate has been steady at 0.6 percent, the lowest level since June 2007. The April foreclosure inventory rate was the lowest for that month in 11 years; it was also 0.6 percent in April 2007.

The rate for early-stage delinquencies (30-59 days past due) fell to 1.8 percent in April, down from 2.2 percent a year ago. The share of mortgages 60-89 days past due was unchanged from a year ago at 0.6 percent. The serious delinquency rate (90 days or more past due, including loans in foreclosure) fell to 1.9 percent, down from 2.0 percent a year ago.

“Job growth, home-price appreciation and full-doc underwriting have pushed delinquency and foreclosure rates to the lowest point in more than a decade,” said Frank Nothaft, chief economist with CoreLogic. “This heightened financial stability is pushing delinquency and foreclosure rates to record lows.”

The report said Florida and Texas-both of which were hit hard by Hurricanes Irma and Harvey, respectively, were the only states showing significant gains in 90-day delinquency rates. According to the CoreLogic Storm Surge Report, Florida has the most densely populated and longest coastal area and thus the most exposure to storm surge flooding (compared to the 19 states analyzed in the report) with more than 2.7 million at-risk homes across five risk categories (Category 1-5 storms). Louisiana ranks second with more than 817,000 at-risk homes, while Texas ranks third with more than 543,000 at-risk homes.

“Delinquency rates are nearing historic lows, except in areas impacted by extreme weather over the past 18 months, reflecting a long period of strict underwriting practices and improved economic conditions,” said Frank Martell, president and CEO of CoreLogic. “Last year’s hurricanes and wildfires continue to affect today’s default rates. The percent of loans 90 days or more delinquent or in foreclosure are more than double what they were before last autumn’s hurricanes in Houston, Texas and Naples, Fla. The 90-day-plus delinquent or in-foreclosure rate has also quadrupled in Puerto Rico.”