Since the pandemic hit in late 2019, mortgage delinquency has dropped drastically, with the lowest being experienced lately. However, borrowers and lenders are still going through several financial challenges.
As of August 2021, about 4% of mortgages in the United States were delinquent for about 20 days and more, including a drop in foreclosure rate from about 6.6% in mid-2020. According to Frank Martell, president, and CEO of CoreLogic, home prices and equity are reaching new highs, driving down delinquencies, and fueling a surge in cash-out refinancing deals.
The most noticeable drop was the significant mortgage delinquency rate (90 days or more past due, including forbearance loans), which fell 17 basis points to 2.6% in August from the previous month. In addition, early-stage delinquencies between August 2020 and August 2021 (30 to 59 days past due) decreased from 1.5 % to 1.1 %. Unfavorable delinquencies (60 to 89 days past due) reduced from 0.8 percent to 0.3 percent during the same period.
According to Frank Nothaft, Chief Economist at CoreLogic, the overall delinquency rate drop hides the substantial financial hardships that individual borrowers and lenders have faced. Only one-in-five delinquent loans had missed six or more payments in the months leading up to the outbreak. However, one-in-two debtors who had skipped payments in August were behind on six or more monthly installments.
According to CoreLogic’s study, the labor market improved less than predicted in August, with 235,000 new positions vs. a forecast total of 720,000. The research says that ongoing income growth and the accumulation of home equity wealth are critical to financial recovery.
To read more on the rate at which mortgage delinquency continues to drop, click the link below
https://www.housingwire.com/articles/mortgage-delinquency-rate-continues-to-shrink/
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