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Experts Express Optimism About Delinquency Rate

CoreLogic releases monthly reports on delinquencies and loan performance for U.S. mortgages. The company on Tuesday published data covering February 2021, which show a nationwide overall delinquency rate at 5.6%, a 2.1 percentage point increase from the previous month.

Mortgage loan delinquency data is important to understanding the overall health of the mortgage market, note researchers at CoreLogic, who add that it is not unusual for the delinquency rate to increase after the holidays.

“Some families that had overspent during the year-end holiday season, and then faced financial stress in the new year, may slip behind on a mortgage payment by February," said CoreLogic Chief Economist Frank Nothaft. "During each of the last five years, the 30-day delinquency rate moved higher from January to February. With economic conditions improving, we expect delinquency rates to move lower in coming months.”

In its Loan Performance Insights Report, CoreLogic notes that government support throughout the pandemic, and improving employment rates have enabled more borrowers to remain current on their mortgages than would otherwise have occurred.

While the overall delinquency inched up in February, the serious delinquency and foreclosure rates continued a sequential monthly decline that began in August, according to CoreLogic President and CEO Frank Martell.

"Consumer confidence continues to rise as the economy roars back to life," Martell said. "These factors bode well for housing fundamentals in 2021 and as far as the eye can see.”

Broken down by stages, early (30-59 days) delinquencies sat at 1.5%, down from 1.8% the previous year.

The share of mortgages 60 to 89 days past due was 0.5%, down from 0.6% in February 2020.

The serious delinquency rate—defined as 90 days or more past due, including loans in foreclosure—was 3.7%, up from 1.2% in February 2020.

Due to state and federal foreclosure moratoria still in place, the foreclosure inventory rate remains low at 0.3%, down from 0.4% in February 2020.

Every U.S. state and nearly all metro areas logged increases in annual overall delinquency rates in February. Hawaii and Nevada (both up 4 percentage points) again logged the largest annual increase in overall delinquency rates in February, according to the report, which also breaks down delinquencies by state, available at CoreLogic.com.

The Consumer Financial Protection Bureau (CFPB) recently has taken several actions to help prevent a wave of foreclosures and to help prepare servicers dealing with record-level delinquency numbers.

Said CFPB Acting Director Dave Uejio earlier this month, “More borrowers are behind on their mortgage than at any time since the height of the Great Recession ... the latest data show that many borrowers are still hurting. The CFPB will continue to seek and actively respond to developments in the market, doing everything in our power to help families stay in their homes.”

One CFPB rule under consideration would temporarily require servicers to enhance communications with borrowers who are delinquent or in forbearance, allow servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships, and require servicers to afford all borrowers a special pre-foreclosure review period. More information is available at consumerfinance.gov.

 

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. Contact Christina at christina.hughesbabb@thefivestar.com.
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