As the overall level continues to decline, the delinquencies in the early and minor stages remain below the prepandemic rates.
CoreLogic® (NYSE: CLGX), a leading global provider of real estate intelligence, analytics, and data-enabled solutions, today released its monthly publication Insights into loan performance Report for January 2021.
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CoreLogic National Mortgage Loan Performance Review with January 2021 data (Chart: Business Wire)
As of January, 5.6% of all mortgages in the US were in a state of default (30 days or more past due, including those in foreclosure), up 2.1 percentage points in overall crime rates from January 2020. National Total Crime has decreased from month to month since August 2020.
In order to get an accurate picture of the mortgage market and the health of credit performance, CoreLogic examines all stages of crime, including the portion that moves from current to 30 days past due. In January 2021, the US crime and transition rates and their changes from the previous year were as follows:
Early phase failures (30 to 59 days overdue): 1.3% after 1.7% in January 2020.
Unwanted crime (60 to 89 days overdue): 0.5% after 0.6% in January 2020.
Serious crime (90 days or more past due, including foreclosure loans): 3.8% down from 1.2% in January 2020, but 0.5 percentage points below the peak in August 2020.
Foreclosure inventory rate (Proportion of mortgages in a certain phase of the foreclosure process): 0.3% after 0.4% in January 2020.
Transition rate (Proportion of mortgages that are overdue from current to 30 days): 0.7% after 0.6% in January 2020.
The year started encouragingly for families in financial need. Arrears were the lowest since the pandemic began. However, millions of homeowners remain in mortgage forbearance plans, which were originally scheduled to expire in March 2021. In order to give the owners additional time to regain their financial base and support during the boom, the Federal Housing Finance Agency announced a six-month extension of the forbearance for government-sponsored corporate loans.
“Although crime rates are higher than we’d like to see, they’re still falling,” said Frank Martell, President and CEO of CoreLogic. “At the same time, foreclosure rates remain at all-time lows. This is a good sign. Given the improving picture of the pandemic and rising employment rates, we see the potential for a strong year of recovery.”
“The transition rate from current to criminal in January was the lowest in twelve months. This is another hopeful sign that family finances are gradually improving,” said Dr. Frank Nothaft, Chief Economist at CoreLogic. “In addition, the transition from 30- to 60-day crime was the lowest since last March and is likely to decline further with strong employment growth. Economists agree that the economy will grow at the fastest rate since 1984 in 2021.”
State and Metro Takeaways:
All US states and almost all metropolitan areas saw annual total crime rates rise in January.
Hawaii and Nevada (up 4.2 and 4.1 percentage points, respectively) saw the largest annual increases in overall crime rates as these states depend on tourism, which has been slow to recover.
Among the subways, Odessa, Texas saw the largest annual increase, 9.7 percentage points, as the area continues to recover from significant job losses in the oil industry.
Other metropolitan areas with a significant increase in crime were Midland, Texas (up 7.7 percentage points) and Kahului, Hawaii (up 7 percentage points).
The next CoreLogic Loan Performance Insights report will be released on May 11, 2021 with data for February 2021. For the latest trends and data on residential real estate, visit the CoreLogic Insights blog: www.corelogic.com/insights.
The data in the CoreLogic LPI report represents foreclosure and delinquency activity reported through January 2021. The data in this report only takes into account the first mortgage liens on a property and does not include secondary mortgages. Crime, transition and foreclosure rates are only measured on homes that have an outstanding mortgage. Houses without a mortgage are not subject to foreclosure and are therefore excluded from the analysis. CoreLogic has approximately 75% coverage of US foreclosure data.
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