How many borrowers were able to stay current with their payments?
Mortgage delinquency rates in the US dropped 2.3% year over year in July, according to CoreLogic’s latest Loan Performance Insights Report.
Data showed that the share of mortgages in some stage of delinquency was down to 4.2% in July – the lowest rate since March 2020.
“Declining delinquency levels are an encouraging sign of economic improvement and the durability of the housing market,” said Frank Martell, president and CEO of CoreLogic.
Early-stage delinquencies (30 to 59 days past due) declined four basis points year over year to 1.1%, while adverse delinquencies (60 to 89 days past due) declined seven basis points to 0.3%. Serious delinquencies (90 days or more past due, including loans in foreclosure) were at 2.8% in July, down from 4.1% a year ago and the lowest level since May 2020.
However, despite the improvement in serious delinquencies, CoreLogic noted that roughly one million Americans have been unable to make payments for at least half a year and still lean on options such as forbearance and loan modifications to keep from entering foreclosure. According to the report, the share of borrowers six months or more past due accounted for about one-half of the total delinquencies in July.
“Even if loan modification or income recovery is unable to help delinquent homeowners become and remain current on their payments, the double-digit rise in home prices may help them avoid a distressed sale,” said CoreLogic chief economist Frank Nothaft. “Homeowners with substantial home equity are far less likely to experience a foreclosure sale, and fortunately, the CoreLogic Home Equity Report found the average owner gained $51,500 in equity in the past year — a five-fold annual increase.”
“Looking ahead to the end of many forbearances and other assistance programs, many borrowers receiving support must consider their financial options, including a potential loan modification, to ensure they stay current and keep foreclosures at bay,” Martell said.