CoreLogic Loan Performance Insights report measures mortgage performance through July and the results may change the way you think about the Great Recession. Perhaps, the Great Recession may not be the greatest yet!
Reports show that the delinquency rate during COVID-19 pandemic has doubled compared during the Great Recession peak.
It is important to measure early-stage delinquency in order to analyze the health of the mortgage market. CoreLogic examines all stages of delinquency and transition rates that indicate the percent of mortgages moving from one stage of delinquency to the next in comprehensively monitoring the mortgage performance.
Breakdown of delinquency stages:
- 30-59 days (early delinquent) 1.5% in July 2020, down from 1.8% last July.
- 60 to 89 days: up 1% from 0.6% in July 2019.
- 90+ days (seriously delinquent): 4.1%, up from 1.3% in July 2019. “This is the highest serious delinquency rate since April 2014,” CoreLogic reported.
- Mortgages that transitioned from current to 30-days past due: 0.8% in July 2020, unchanged from July 2019. “The transition rate has slowed since April 2020, reports CoreLogic, when it peaked at 3.4%.
Dr. Frank Nothaft, Chief Economist at CoreLogic revealed that only 4 months into the pandemic, the 120-delinquency rate spiked to 1.4% for July. He added that the spike in delinquency was all the more stunning given the generational low of 0.1% in March.
This was the highest rate in more than 21 years and doubles the December 2009 Great Recession peak.
Home values according to the CoreLogic Home Price Index are rising at an accelerated rate however, the level of unemployment in hard-hit areas is still stubbornly high.
Borrowers are house-rich but cash poor.
Several sectors of the economy are slowly starting to reopen, unfortunately other industries like entertainment, tourism, oil and gas are still left at uncertainty for the rest of 2020. With unemployment below natural rates, Americans desperately tap their savings just to keep up with their home loans. But as savings run out, borrowers could be pushed further down the delinquency funnel.
Analytics Before Foreclosure helps you come up with intelligent options if you are behind your payment. With extensive knowledge of working with the banks, homeowners get favorable outcomes. If you are or feel you will be, facing foreclosure. Contact us today at 866-857-5405 for a FREE discovery call.
