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Seriously Delinquent Borrowers Struggling to Recover

According to CoreLogic, the nation’s delinquency rate in the U.S. in February 2022 hit its lowest recorded point since at least January 1999, as found in its monthly Loan Performance Insights Report. 

In February of this year, some 3.2% of all mortgages in the country were in some stage of delinquency, as defined as being at least 30 days past due. Compared to February 2021, this is a 2.5 percentage point drop from the original 5.7%. 

In February 2022, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows: 

  • Early-Stage Delinquencies (30 to 59 days past due): 1.3%, down from 1.5% in February 2021. 
  • Adverse Delinquency (60 to 89 days past due): 0.3%, down from 0.5% in February 2021. 
  • Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.6%, down from 3.7% in February 2021 and a high of 4.3% in August 2020. 
  • Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.2%, down from 0.3% in February 2021. This remains the lowest foreclosure rate recorded since at least January 1999. 
  • Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.8%, down from 0.9% in February 2021. 

The drop marks the eleventh consecutive month of year-over-year declines. This can be attributed to the market in February beginning to transition to the busier spring season, as home prices rose almost 21% since March 2021. 

However, CoreLogic expects national appreciation to cool to around 6% by March 2023, which could cause equity gains to slow for homeowners in some areas of the country, providing less protection from mortgage defaults for those who fall behind on their payments. 

“While job and income gains have helped push delinquency rates lower, some families continue to face financial stress,” said Dr. Frank Nothaft, CoreLogic’s Chief Economist. “One-half of the borrowers who are seriously delinquent are behind on their payments by six or more months. Even though this group has been declining, the number that have missed at least six monthly payments is still double what it was in the months immediately prior to the pandemic.” 

All states logged year-over-year declines in their overall delinquency rates in January. The states with the largest declines are: 

  • Nevada (down 3.9 percentage points) 
  • Hawaii (down 3.7 percentage points) 
  • Louisiana (down 3.7 percentage points) 

All metro areas with enough data to track saw at least a small decrease in overall delinquency rates. The metropolitan areas that saw the largest decrease in the overall delinquency rates were: 

  • Odessa, Texas (down 7.2%) 
  • Laredo, Texas (down 6.7%) 
  • Kahului-Wailuku-Lahaina, Hawaii (down 5.4%) 

To view a complete copy of the report, including interactive data, click here. 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at kyle.horst@thefivestar.com.
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