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Declining Delinquency Rate Points to ‘Increasing Stabilization’

CoreLogic releases monthly reports on delinquencies and loan performance for U.S. mortgages. The company on Tuesday published data covering November 2020 [1], which show that, nationwide, 5.9% of mortgages are 30-plus days past due.

Numbers reported in CoreLogic's Loan Performance Insights [2], which include mortgages in foreclosure, represent a 2 percentage point increase in the overall delinquency rate compared to November in 2019.

The unemployment rate has a major impact on loan performance, the monthly studies have shown.

The unemployment rate fell from 14.8% in April to 6.7% by the end of 2020, CoreLogic reported, adding that the recent rebound in employment has helped some struggling homeowners begin to make payments again.

“Urban areas hit hard by the pandemic recession or by a natural disaster experienced the largest spike in delinquency over the last year," Frank Nothaft Chief Economist for CoreLogic said. "Forbearance and loan modification helped struggling families rebuild their financial house in hard-hit places. While vaccination will mitigate the pandemic, the best cure for delinquency is income restoration through job creation.”

Broken down by stages, early (30-59 days) delinquencies sat at 1.4% down from 2% in November 2019. Mortgages 60 to 89 days past due amounted to .6%, which is unchanged from November 2019.

The serious delinquency rate (90+ days late including loans in foreclosure) hit 3.9%, up from 1.3% in November 2019.

The good news is that this is the lowest serious delinquency rate since June 2020, the researchers say, "pointing to signs of increasing stabilization."

“The consistent decline in serious delinquency since August is a sign of growing financial stability for families," said  Frank Martell, President and CEO of CoreLogic. "In addition to ensuring that homeowners stay in their homes, the decline in delinquency means fewer distressed sales, which is both a positive for individual households and the overall housing market.”