“The guidelines were more stringent and the people who have taken on loans have better credit,” Kane Smeltz, president of Kane Mortgage, told Mortgage Professional America. “But lenders have loosened a bit in the last six months because delinquencies have been dropping.”
According to the report, delinquencies (loans 30 or more days past due but not in foreclosure) increased 2.47% month-over-month, but declined 18.22% year-over-year. That drop is the largest year-over-year decline since May 2011.
Delinquencies currently sit at 4.43%.
The report, from the data and analytics division of the firm, is derived from its loan-level database, which represents two-thirds of the overall market.
The top states for non-current loans (either foreclosure or delinquencies) are Mississippi (12.95%), New Jersey (10.16%), Louisiana (10.12%), Maine (9.04%), and New York (8.92%).
The bottom five states for non-current loans are Montana (3.45%), South Dakota (3.37%), Minnesota (3.29%), Colorado (2.98%), and North Dakota (2.11%).
As of August, 2,447,000 Americans owe past-due payments.
However, August’s figures echo a trend reported by CoreLogic released earlier this month.
“Job market gains and home-price appreciation help to push serious delinquency and foreclosure rates lower,” Frank Nothaft, CoreLogic’s chief economist, said in the report.
That report showed a 67.9% decline in foreclosures in July 2015 from the peak of the financial downturn.
“The recovery in the housing market is also reflected in declining delinquency and foreclosure rates which, to some degree, reflects the progressive clearing of crisis-era loans and the benefits of tighter underwriting standards over the past six years,” CoreLogic CEO Anand Nallathambi said in the report.
Nallathambi’s analysis is in line with Kane’s.
The delinquency rate in the United States dropped drastically year-over-year in August, according to Black Knight Financial Services and one industry player is crediting tighter underwriting.