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Serious Delinquencies Elevated Compared to Pre-Crisis

Delinquent Notice BHThe decline in the number of foreclosures and seriously delinquent mortgages over the last six years has been well-documented. That decline has been steady and sustained and is considered by housing market analysts and economists to be the symbol of a healing housing market, the level of serious delinquencies remains elevated compared to their early 2000s level, according to data released on Thursday by the Urban Institute.

The Urban Institute's May 2016 Chartbook reported that the share of residential mortgage loans either 90-plus days overdue or in active foreclosure was 3.4 percent as of the end of the fourth quarter in 2015. Although down from 4.5 percent from the same quarter a year earlier, it was up from the 2 percent level which it hovered in the six years prior to the crisis. It peaked at close to 10 percent in the second half of 2009.

Urban Institute's data was consistent with the numbers reported by CoreLogic in the latest national foreclosure report, which covered through the end of March 2016. CoreLogic reported 36,000 completed foreclosures during March, which is down by 23 percent over-the-year but still way above the pre-crisis monthly average of 21,000 from 200o to 2006.

"Longer term, as loans made since 2009 account for a larger share of outstanding debt, we anticipate that the serious delinquency rate will have further substantive declines," said Anand Nallathambi, president and CEO of CoreLogic.

According to Urban Institute, the percentage of residential loans in foreclosure was 1.8 percent as of the end of the fourth quarter, compared with a rate that hovered between about 1 percent and 1.3 percent from the six year-period from 2000 to 2006. The percentage of loans 90 days delinquent was 1.7 percent as of the end of Q4, according to Urban Institute, after staying at or near 1 percent in the six years pre-crisis.

Click here to view the complete May 2016 Chartbook from Urban Institute.

Urban Inst Graph 2

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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