CoreLogic: Mortgage Delinquency Rates Hit Record Highs and Lows in 2020

CoreLogic recently released its monthly Loan Performance Insights Report for December 2020.

On a national level, 5.8% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure), which represents a 2.1-percentage point increase in the overall delinquency rate compared to December 2019, when it was 3.7%. However, national overall delinquency has been declining month to month since June 2020.

To gain an accurate view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency, including the share that transitions from current to 30 days past due. In December 2020, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows:

– Early-Stage Delinquencies (30 to 59 days past due): 1.4%, down from 1.8% in December 2019.

– Adverse Delinquency (60 to 89 days past due): 0.5%, down from 0.6% in December 2019.

– Serious Delinquency (90 days or more past due, including loans in foreclosure): 3.9%, up from 1.2% in December 2019.

– Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.3%, down from 0.4% in December 2019.

– Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 0.8%, unchanged from December 2019.

2020 began with the lowest share of overall delinquencies (30-plus days past due) since data recording started in 1999, but as the pandemic and shelter-in-place directives spread, the rate doubled from 3.6% in March to 7.3% in May. As those initially affected by the pandemic and ensuing recession transitioned through stages of delinquency, serious delinquencies (90-plus days past due) increased four-fold compared to pre-pandemic rates, peaking in August.

“The ongoing forbearance provisions and economic aid implemented at the start of the pandemic has proved helpful for families faced with financial insecurity,” said Frank Martell, president and CEO of CoreLogic.

“Places with large job losses during the last year also experienced big jumps in mortgage delinquencies,” said Dr. Frank Nothaft, chief economist at CoreLogic. “By state, Hawaii and Nevada had the largest 12-month spike in delinquency rates, both up 4.1 percentage points. They also had large increases in unemployment rates, up 6.6 percentage points in Hawaii and 5.5 percentage points in Nevada compared with 3.1 percentage points for the U.S. In Odessa, Texas, unemployment rose by 8.6 percentage points and delinquencies posted a 9.8 percentage-point jump.”

State and Metro Takeaways:

– All U.S. states and nearly all metro areas logged increases in annual overall delinquency rates in December.

– Hawaii and Nevada (both up 4.1 percentage points) logged the largest annual increase in overall delinquency rates.

– Among metros, Odessa, Texas, experienced the largest annual increase with 9.8 percentage points, largely due to significant job loss in the oil industry.

– Other metro areas with significant overall delinquency increases included Lake Charles, Louisiana (up 7.6 percentage points); Midland, Texas (up 7.5 percentage points) and Kahului, Hawaii (up 6.8 percentage points).

Source: CoreLogic