For First Time Since Spring, Serious-Delinquency Rates Hold Steady

Data for September collected by analysts at CoreLogic showed 6.3% of mortgages in the United States are in some stage of delinquency (that includes loans in foreclosure).

Compared to September 2019, the delinquency rate nationwide has increased by 2.5 percentage points.

“Although delinquencies remain high, it’s clear the economy has passed an initial stress test," CoreLogic CEO Frank Martell said. "High home equity balances and structural protections put in place as a result of the Great Recession contributed to surviving this test. Housing demand remains strong, and rates low, which provides optimism that the housing market will continue to be a bright spot in this COVID-ravaged economy.”

Serious delinquencies of 90+ days past due leveled out during the reporting period for the first time since April.

According to CoreLogic's report, "This is in part due to the Dodd-Frank Act, which limits consumer exposure to risky-lending practices; the CARES Act, which affords borrowers more time to seek financial stability; and a record amount of home equity fueled by rapid home price growth, which provides a buffer against foreclosure."

Chief Economist for CoreLogic, Frank Nothaft, added that the researchers' analysis of CoreLogic's public records shows more than half of residential mortgage loans originated since the onset of the pandemic have been no-cash-out refinance. "By reducing their mortgage rate with these types of loans, homeowners have been lowering both their interest expense and risk of delinquency," Nothaft said.

Nationwide, the severity of delinquencies during September 2020 can be broken down as such:

• Early-stage delinquencies (30 to 59 days past due) 1.5%, down from 1.9% in September 2019.
• 60 to 89 days past due was 0.7%, up from 0.6% in September 2019.
• Serious delinquency (90 days or more past due and including loans in foreclosure) was 4.2%, up from 1.3% in September 2019 (but down slightly from 4.3% in August)

As of September 2020, the foreclosure inventory rate was .3%, down from .4% in September last year.

CoreLogic's monthly loan performance reports can be accessed in full at CoreLogic.com.