CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report for March 2020. On a national level, 3.6% of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure). This represents a 0.4-percentage point decrease in the overall delinquency rate compared with March 2019, when it was 4%.
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CoreLogic National Overview of Mortgage Loan Performance, featuring March 2020 Data (Graphic: Business Wire)
To gain an accurate view of the mortgage market and loan performance health, CoreLogic examines all stages of delinquency, including the share that transition from current to 30 days past due. In March 2020, the U.S. delinquency and transition rates, and their year-over-year changes, were as follows:
- Early-Stage Delinquencies (30 to 59 days past due): 1.9%, down from 2% in March 2019.
- Adverse Delinquency (60 to 89 days past due): 0.6%, unchanged from March 2019.
- Serious Delinquency (90 days or more past due, including loans in foreclosure): 1.2%, down from 1.4% in March 2019. For the third consecutive month, the serious delinquency remained at its lowest level since June 2000.
- Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 0.4% in March 2020, unchanged from March 2019.
- Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 1% in March 2020, up from 0.9% in March 2019. In January 2007, just before the start of the financial crisis, the current- to 30-day transition rate was 1.2%, while it peaked in November 2008 at 2%.
In the months leading up to the coronavirus (COVID-19) pandemic, U.S. mortgage performance was showing sustained improvement. In March — one month after the U.S. annual unemployment rate hit a 50-year low — the nation’s overall delinquency rate continued to decline year over year, following a trend that began in January 2018. However, the job market began its downward spiral in March as shelter-in-place orders went into effect, thus increasing the likelihood of borrowers falling behind on their mortgage payments.
“The COVID-19 pandemic has shocked our economic system and led to unprecedented job loss, reducing the ability of affected families to make their monthly mortgage payments,” said Dr. Frank Nothaft, chief economist at CoreLogic. “The latest forecast from the CoreLogic Home Price Index shows prices declining in 41 states through April 2021, potentially erasing home equity and increasing foreclosure risk.”
Local economies fueled by tourism, transportation, hospitality, food service and media and entertainment industries were among the first to be impacted by widespread job losses. For example, both Hawaii and Nevada were hit hard by the collapse in tourism, and in Washington, where the first U.S. cases of COVID-19 were confirmed. In early May, these states experienced the highest shares of continuing claims for unemployment insurance, as compared to the state’s labor force. While the full impact of climbing unemployment in these local markets has yet to be seen, the early signs of unsteadiness could leave these areas more susceptible to delinquency gains in the coming months.
“The first three months of 2020 reflected one of the strongest quarters for U.S. mortgage performance in recent history,” said Frank Martell, president and CEO of CoreLogic. “The build-up in home equity over the past several years, government stimulus programs, and lower borrowing costs have helped cushion homeowners from the initial financial shock of the pandemic and kept widespread delinquencies at bay during the first months of the recession. Looking ahead, we can expect a more widespread impact on U.S. delinquency rates as the economic toll of elevated unemployment and shelter-in-place orders becomes more evident.”
The next CoreLogic Loan Performance Insights Report will be released on July 14, 2020, featuring data for April 2020.
For ongoing housing trends and data, visit the CoreLogic Insights Blog: www.corelogic.com/insights.
The data in The CoreLogic LPI report represents foreclosure and delinquency activity reported through March 2020.
The data in this report accounts for only first liens against a property and does not include secondary liens. The delinquency, transition and foreclosure rates are measured only against homes that have an outstanding mortgage. Homes without mortgage liens are not subject to foreclosure and are, therefore, excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 75% coverage of U.S. foreclosure data.
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