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Mortgage Delinquency Hits Lowest Rate in a Decade

past-due-twoCoreLogic, a leading global property information, analytics, and data-enabled solutions provider, today released its latest monthly Loan Performance Insights Report, tracking delinquencies and foreclosure data during the month of September 2017. Although the Report shows an uptick in early-stage delinquencies owing to the impact of hurricane season, overall delinquency rates were the lowest they’ve been in a decade.

On a national scale, CoreLogic reports that 5 percent of mortgages were in some stage of delinquency in September 2017. That’s down 0.2 percent below the September 2016 rate of 5.2 percent.

The foreclosure inventory rate—a measure of the mortgages that are in some stage of the foreclosure process—dropped from 0.8 percent to 0.6 percent in September 2017. Moreover, the foreclosure inventory rates for both August and September were at 10-year lows, matching the June 2007 rate of 0.6 percent. In fact, September’s rates were the lowest they’ve been during the month of September in 11 years—rates were at 0.5 percent in September 2006.

Early-stage delinquencies (those between 30-59 days past due) did tick upward in September 2017, however, hitting 2.4 percent as compared to 2.1 percent the year prior. Mortgages 60-89 days past due remained steady at 0.7 percent, matching the September 2016 numbers. The rate for serious delinquencies, over 90 days past due, declined to 1.9 percent in September 2017, down 0.4 percent year over year. According to CoreLogic’s report, “The 1.9 percent serious delinquency rate in June, July, August, and September of this year marks the lowest level for any month since October 2007 when it was also 1.9 percent, and is also the lowest for the month of September since 2007 when the serious delinquency rate was 1.8 percent.”

Dr. Frank Nothaft, Chief Economist for CoreLogic, attributed the increase in early-stage delinquencies to the effects of the hurricanes that hit Texas, Florida, and Puerto Rico earlier this year. “September’s early-stage delinquency transition rate rose to 2.6 percent in Texas and it rose to 3.2 percent in Florida, which is higher than the 1 percent that’s typical for both states,” Nothaft said. “Texas and Florida’s early-stage delinquency transition rates in September are much lower than New Orleans in September 2005 when the transition rate reached 17.4 percent as a result of Hurricane Katrina.”

The share of mortgages that transitioned from current to 30 days past due was at 1.3 percent for September 2017, as compared to 0.9 percent for September 2016. The September 2017 rate was the highest for any month since November 2014 (1.4 percent). It peaked in November 2008 at 2 percent.

Frank Martell, President and CEO of CoreLogic, said, “While natural hazard risk was elevated in 2017, the economic fundamentals that drive mortgage credit performance are the best in two decades. The combination of strong job growth, low unemployment rates, steady economic performance, and prudent underwriting has led to continued improvement in mortgage performance heading into next year.”

You can read CoreLogic’s full Loan Performance Insights Report for September 2017 by clicking here.

About Author: David Wharton

David Wharton, Editor-in-Chief at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has over 17 years' experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas. He can be reached at David.Wharton@thefivestar.com.

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