Important Mortgage Performance Metric Best in 10 Years

Early state mortgage delinquencies are an important measure of mortgage market health, and CoreLogic reports they are continuing to decline.  In January, the company found 5.3 percent of mortgaged homeowners were 30 days or more behind in their payments, down by 1.1 percentage points from the delinquency rate in January 2016.  Serious delinquencies, loans 90 or more days past due or in foreclosure, were at a 2.5 percent rate, down from 3.2 percent a year earlier.

Broken down to more discrete intervals, CoreLogic says early-stage delinquencies, defined as 30-59 days past due, were trending lower in January 2017 at 2.1 percent compared with 2.4 percent in January 2016. The share of mortgages that were 60-89 days past due in January 2017 was 0.7 percent, down from 0.8 percent in January 2016.  Alaska was the only state in which delinquencies, both early and serious, increased.

The company notes that early-stage delinquencies can be volatile so it also tracks the rate of transition from one interval to another. Past due mortgages moved from current to 30 days past due at an 0.9 percent rate in January, down from 1.2 percent the previous January.  By comparison, in January 2007, just before the start of the financial crisis, the current to 30-day transition rate was 1.2 percent and peaked in November 2008 at 2 percent.

CoreLogic's new Loan Performance Insights Report also notes that, as of January 2017, the foreclosure inventory rate, which measures the share of mortgages in some stage of the foreclosure process, was 0.8 percent compared with 1.1 percent in January 2016.

"Steady job and income growth, combined with full-doc underwriting, has led to low early-stage delinquencies," said Dr. Frank Nothaft, chief economist for CoreLogic. "January's 0.9 percent transition rate for current to 30 days late is lower than a year ago and much lower than the 1.5 percent average from 2000 and 2001, during which the foreclosure rate was, conversely, lower than it is today."

"The 30-plus delinquency rate, the most comprehensive measure of mortgage performance, is at a 10-year low and rapidly declining," said Frank Martell, president and CEO of CoreLogic. "While late-stage delinquencies remain in the pipeline in selected markets, early-stage delinquency performance is stellar and the lowest it's been in two decades. The continued improvement in mortgage performance bodes well for the health of the market in 2017."