Extremely serious
delinquencies, those loans 150 days or more past due, reached historically high
levels in August.
Five months into the COVID-19 crisis, Corelogic said the rate
of delinquencies among those loans spiked to 1.2 percent, the highest level since
at least January 1999, which we assume is the limit of the company’s records. CoreLogic
said this surge was likely due to large volumes of
delinquencies moving in tandem through the pipeline.

Dr. Frank Nothaft, chief economist
at CoreLogic said, “This was the highest rate in more than 21 years and double
the January 2010 peak during the home-price bust. The spike in delinquency was
all the more stunning given the generational low of 0.08 percent in March and
April.”

Loans meeting the more
traditional measure of serious delinquency, 90 or more days past due including
loans in foreclosure, now include 4.3 percent of active mortgages, up from 1.3
percent in August 2019. This is the highest serious delinquency rate since
February 2014.

The company’s August Loan
Performance Insights
reports that forbearance provisions and foreclosure moratoriums
have
helped keep foreclosure inventories at historic lows. The share of
mortgages in some stage of the foreclosure process in August was 0.3 percent, down
from 0.4 percent a year earlier and the lowest since, again, at least January
1999.

Homeowners
nearing the end of the first 180-day grace period (afforded to borrowers with
federally backed mortgages) can request an extension of an additional 180 days,
which is keeping foreclosure rates low while serious delinquency continues to
climb, the report said. However, back-mortgage payments continue to add up for
those unable to exit forbearance periods early. Looming unpaid mortgage
payments, paired with sharp declines in income for many families, point to a
potential wave of home sales triggered by financial distress in 2021 as
forbearance periods end.

At the other end of the delinquency continuum,
the non-current rate is trending down.  Early
Stage Delinquencies, loans 30 to 59 days past due, were at a rate of 1.6
percent, down from 1.8 percent the previous August and from 4.2 percent in
April when the pandemic first took hold.   Adverse
Delinquency ( loans 60 to 89 days past due) rose from 0.6 percent in August
2019 to 0.8 percent but were down from 1 percent in July and 2.8 percent in
May.

The upshot is that the national
delinquency rate, all mortgages 30 or more days past due including loans in
foreclosure, was at 6.6 percent in August. This
represents a 2.9-percentage point increase in the overall rate compared to the August 2019 rate of 3.7 percent.
 

CoreLogic also looked at the Transition
Rate. In August 2020 0.9 percent of loans transitioned from current to 30 days
past due
compared to 0.8 percent which did so in August 2019. The transition
rate has slowed since April 2020, when it peaked at 3.4 percent.

On a more granular level, every state and nearly every metro
area logged an annual increase in overall delinquencies during the month. States
with popular tourist destinations again showed the
highest increases, with Nevada (up 5.3 percentage points), Hawaii (4.9
percentage points), New Jersey (4.6 percentage points), Florida (4.5 percentage
points) and New York (4.4 percentage points) topping the list for gains.

Among metro areas, the
greatest annual increase, 10.1 percentage points, was in Odessa, Texas, which
has been hard hit by job losses in the oil and gas industry. Other metro areas
with significant serious delinquency increases included Midland, Texas, (7.9 points),
Kahului, Hawaii (7.6 points) and Miami (7.0 points). Dubuque, Iowa, was the
only metro area with an annual decline. Its delinquency rate was down 1.5
percent

By Jann Swanson , dated 2020-11-10 12:25:44

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Courtesy of Mortgage News Daily

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