According to CoreLogic’s recent Loan Performance Report, mortgage delinquency rates reached pre-pandemic levels in October due to labor market developments and home equity growth. During the year 2022, rates are expected to continue to fall. In October 2019, 3.8% of mortgages were 30 days or more past due, including foreclosure, which was similar to the 3.7% rate recorded in the same time of 2019. The delinquency rate was 6.1% in October of 2020.
In a statement released by Frank Martell, president, and CEO of CoreLogic, he stated that Enhanced economic stability and the advantages of disciplined underwriting methods have helped avoid or mitigate mortgage delinquencies over the previous decade. According to Martell, delinquency is expected to decline as the economy recovers from the epidemic, employment increases, and strong fiscal and monetary stimulus levels remain in place. He further added that as the economy continues to recover from the pandemic, employment grows, and elevated fiscal and economic stimulus levels remain in place, delinquency is expected to decline.
The transition rate, which refers to mortgages that go from current to 30 days past due, fell one basis point to 0.7% in October, the lowest in a year. In addition, in October, the severe mortgage delinquency rate (90 days or more late payment, including forbearance loans) fell 19 basis points from the previous month to 2.2%.
According to Frank Nothaft, CoreLogic’s senior economist, Loan modifications have assisted in lowering loans in substantial delinquency. However, some debtors continue to face serious financial difficulties. However, there were roughly half a million more loans in significant default in October than at the onset of the pandemic in March 2020.
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