Mortgage Delinquency Rates Surpass Pre-Pandemic Levels Of 2019 At 3.8%

Mortgage delinquency rates have hit pre-pandemic levels in October. Lending experts say the number will increase substantially in the coming months.  CoreLogic Loan Performance Report says this is due to labor market improvements and home equity increases. The report also states that rates will continue to decline during 2022.

The report says 3.8% of mortgages were delinquent by at least 30 days including loans in active foreclosure. This higher than the number of people in foreclosure at the same point in 2019. The number of homes in foreclosure in October 2019 was 3.7%.  In October of 2020, the delinquency rate was at 6.1%.

The report found that 82% of the jobs lost in March and April 2020 were recovered by October, accounting for 18.2 million Americans back at work, according to the Bureau of Labor Statistics.

What Will Happen To Mortgage Delinquency In The Near Future?

Housing experts have different opinions on what will happen in the future. Some experts say they expect delinquency will trend down as the economy continues to rebound from the pandemic. However others say it rise expedentially. 

CoreLogic also points to the transition rate. The transition rate is the number of mortgages transitioning from current to 30 days past due. Experts say this has dropped one basis point in one year to 0.7%.

The serious mortgage delinquency rate dipped 19 basis points year over year to 2.2% in October. This includes deliquencies of 90 days or onger or loans in forbearance.

Frank Nothaft, CoreLogic’s chief economist, mentioned that loan modifications have helped reduce loans in serious delinquency.

However, some borrowers are still facing severe financial challenges. “Nonetheless, there were about one-half million more loans in serious delinquency in October than at the start of the pandemic in March 2020.”

The report only focuses on first liens against a property. The report also measures rates only against homes with an outstanding mortgage. CoreLogic has approximately 75% coverage of U.S. foreclosure data.

Read More About Mortgage Deliquencies Below:

14,500 Long Islanders Are In Mortgage Default

Property Tax Increases Cause Foreclosure Rates To Skyrocket