CoreLogic: Mortgage Delinquency, Foreclosure Rates Lowest for June in 12 Years

For the overwhelming majority of Americans–and mortgage lenders and servicers–there’s more good news on mortgage delinquencies and foreclosures.

CoreLogic, Irvine, Calif., this morning released its monthly Loan Performance Insights Report, noting 4.3 percent of mortgages in some stage of delinquency (30 days or more past due, including those in foreclosure) in June, an 0.3 percentage-point decline from a year ago (4.6 percent).

The report also said the foreclosure inventory rate fell to 0.5 percent, down 0.2 percentage points from 0.7 percent a year ago, representing the lowest rate since September 2006.

CoreLogic said the rate for early-stage delinquencies (30-59 days past due) was unchanged in June from a year ago at 2 percent cent. The share of mortgages 60-89 days past due in June 2018 was 0.6 percent, also unchanged from June 2017. The serious delinquency rate (90 days or more past due, including loans in foreclosure) fell to 1.7 percent in June, down from 1.9 percent a year ago. This is the lowest rate for June since 2007, when it was 1.6 percent and the lowest for any month since August 2007 (1.7 percent).

The report said the share of mortgages that transitioned from current to 30 days past due was unchanged in June at 0.9 percent 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, while it peaked in November 2008 at 2 percent.

“A solid labor market enables more homeowners to remain current on their mortgage,” said CoreLogic Chief Economist Frank Nothaft. “While this has helped reduce delinquencies nationally, delinquency rates in areas hit by wildfires, hurricanes or other natural disasters have jumped as families deal with financial disruption and tragedy. The loss of housing and displacement of families also tends to drive up local rents and reduce vacancies.”

The report said Florida and Texas posted annual gains in overall delinquency rates. After last year’s trio of hurricanes–Harvey, Irma and Maria–serious delinquency rates on home mortgages tripled in the Houston, Texas, and Cape Coral, Florida, metro areas and quadrupled in San Juan, P.R.

“Due to last year’s hurricane season, Florida and Texas experienced increases in serious delinquency rates over the past year,” said Frank Martell, president and CEO of CoreLogic. “Neighborhoods impacted by similar disasters in 2018 should also expect to see a spike in delinquencies in the coming year. With storms and wildfires currently impacting multiple areas of the country, homeowners, lenders and servicers should remain vigilant of potential impacts, particularly those in California, Hawaii and the Rocky Mountain and Gulf Coast states.”

Earlier this week, Black Knight, Jacksonville, Fla., reported the total loan delinquency rate fell to 3.61 percent in July, down by more than 3 percent from June, while tappable equity reached three times its 2012 levels.

Last month, the Mortgage Bankers Association reported delinquency rates for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 4.36 percent of all loans outstanding at the end of the second quarter, down 27 basis points from the previous quarter, but up 12 basis points from one year ago. MBA said the percentage of loans on which foreclosure actions were started dropped four basis points from the first quarter to 0.24 percent, its lowest level since second quarter 1987.