January Early-Stage Delinquencies, Inventories Down

Mike Sorohan msorohan@mba.org

April 11, 2018

CoreLogic, Irvine, Calif., said mortgage delinquencies fell in January as the impact from 2017 hurricanes and wildfires faded.

The company's monthly Loan Performance Insights Report said 4.9 percent of mortgages were in some stage of delinquency (30 or more days past due, including foreclosure) in January, down by 0.2 percent from a year ago.

CoreLogic reported the foreclosure inventory rate fell to 0.6 percent, down 0.2 percentage points from 0.8 percent a year ago. Since August, the foreclosure inventory rate has held steady at 0.6 percent, the lowest level since June 2007. The January foreclosure inventory rate was the lowest for the month of January in 11 years.

The rate for early-stage delinquencies (30-59 days past due) fell to 2 percent in January, down from 2.3 percent in December and from 2.1 percent a year ago. The share of mortgages 60-89 days past due in January held steady at 0.8 percent, unchanged from December and up from 0.7 percent a year ago. The serious delinquency rate (90 days or more past due, including loans in foreclosure) was unchanged at 2.1 percent in January from December and down from 2.3 percent a year ago.

"The areas hit by last year's hurricanes and wildfires are experiencing the ‘pig in a python' effect on their local delinquency rates. Early-stage delinquencies have largely dropped back to normal, while serious delinquency remains elevated," said Frank Nothaft, chief economist for CoreLogic. "In hard-hit markets, like the Houston and Naples metro areas, serious delinquency is triple what it was before the hurricanes. And in the San Juan area of Puerto Rico, serious delinquency has quadrupled."

The report said the share of mortgages that transitioned from current to 30 days past due fell to 0.8 percent in January, down from 1.1 percent in December and down from 0.9 percent a year ago, representing the lowest for the month of January since at least 2000. By comparison, in January 2007, just before the start of the financial crisis, the current- to 30-day transition rate was 1.2 percent, while it peaked in November 2008 at 2 percent.

"Except for the metropolitan areas affected by natural disasters, most of the country has seen delinquency and foreclosure rates move lower over the past year," said Frank Martell, president and CEO of CoreLogic. "Declines in the unemployment rate have supported a rise in income, and home-price growth has built home equity. These two economic forces coupled with high-quality underwriting have lowered overall delinquency rates."

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