High Rate of Performing Loans Spells a Healthy Market

The M Report - Aly J Yale - 9 May 2016

Delinquencies and foreclosures are both down over the year, according to the February 2017 Loan Performance Insights Report released by CoreLogic on Tuesday. February saw 30-day delinquencies, 90-day delinquencies, and foreclosure inventory drop over 2016’s numbers.

According to the report, only 5 percent of mortgages were 30 or more days delinquent, a dip from February 2016’s 5.5 percent. Loans 90 or more days delinquent were down too, falling from 2.8 percent to 2.2 percent year over year. The number of homes currently at some stage of the foreclosure process dropped from 1.1 percent to 0.8 percent.

“Serious delinquency and foreclosure rates continue to drift lower and are at their lowest levels since the fourth quarter of 2007,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “Moreover, the past-due share dropped to 5 percent, the lowest since September 2007.”

Despite these downticks, delinquencies in the 30- to 59-day range—what CoreLogic considers “early-stage delinquencies”—were up just slightly over the year, rising from 2.08 percent in 2016 to 2.14 percent in 2017. Tracking these types of delinquencies—as well as the rates at which they transition into serious delinquency or even foreclosure—is important to assessing overall market health, according to CoreLogic.

The report showed that 1 percent of mortgages went from current to 30-days delinquent in February 2017, rising from 0.8 percent last year. This transition rate was 1.2 percent before the housing crisis and peaked at 2 percent at the height of it.

Serious delinquency rates, as well as transition rates into delinquency, varied by geographic region, with more mortgages past due in the Northeastern U.S.

“While national-level delinquency rates declined, the serious delinquency rate remained elevated in many mid-Atlantic and northeast states led by New York and New Jersey,” said Frank Martell, President and CEO of CoreLogic. “February-to- February increases in both 30-day-or-more delinquency rates and in serious delinquency rates were also observed in Alaska, Louisiana and Wyoming relating to the impact of the downturn in the global oil market.”

Louisiana saw the most mortgages 30-days or more past due, with 8.6 percent.  At a metro level, the Miami-Miami Beach-Kendall, Florida, area had the highest delinquency rate at 7.6 percent.