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What Is Pushing Delinquencies Down?

mortgage loans performanceForeclosure inventory touched an 18-year low in November 2018 with the share of mortgages in some stage of foreclosure inching down 0.2 percentage points to 0.4 percent on a year-over-year basis, according to CoreLogic's Loan Performance Insights Report.

Nationally, the report indicated, 4.1 percent of mortgages were in some stage of delinquency in November, declining 1.1 percent compared with November 2017.

The report also measures early-stage delinquency--an important indicator of the housing market's health. It revealed that mortgage loans that were 30 to 59 days past due were at 2 percent in November inching down from 2.2 percent recorded during the same period in the prior year. Sixty to 89 days past due mortgages were also slightly down at 0.7 percent from November 2017.

However, areas such as California and the Southeast, which saw natural disasters hit the region earlier in 2018, saw a slight rise in delinquency rates in November, the report indicated.

“On a national basis, we continue to see strong loan performance,” said Frank Martell, President and CEO of CoreLogic. “Areas that were impacted by hurricanes or wildfires in 2018 are now seeing relatively large annual gains in the share of mortgages moving into 30-day delinquency. As with previous disasters, this is to be expected and we will see the impacts dissipate over time.”

The report found loan vulnerability in many North Carolina metro areas which were struggling after Hurricane Florence hit the state in September. In November 2018, seven metros in the state logged an increase in their serious delinquency rates, with the largest gains seen in Wilmington and New Bern.

Despite these pockets, the report said that the overall national delinquency rate had fallen over the past 11 consecutive months. Looking at transition rates, the share of mortgages that transitioned from current to 30 days past due was 0.9 percent in November down from 1 percent during the same period in the prior year. In January 2007, just before the start of the financial crisis, the report said, the current-to-30-day transition rate was 1.2 percent, which peaked to 2 percent in November 2008.

“Solid income growth, a record amount of home equity and an absence of high-risk loan products put the U.S. homeowner on solid ground,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “All of this has helped push delinquency and foreclosure rates to the lowest levels in almost two decades, and will provide a cushion if the housing market should turn down.”

About Author: Radhika Ojha

Radhika Ojha is an independent writer and copy-editor, and a reporter for DS News. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.
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