Mortgage Delinquency Rates Reach Pre-Pandemic Levels in October

According to CoreLogic Loan Performance Report for October, which was released on Tuesday (1-11-22), mortgage delinquency rates reached their pre-pandemic levels in October. The drop in the delinquency rate is being credited to an improving labor market and home equity increases. CoreLogic’s expectations are that rates will continue to decline during 2022.

According to the report, in October, 3.8% of mortgages were delinquent by at least 30 days, including foreclosure, close to the 3.7% rate registered in the same period of 2019. In October of 2020, the delinquency rate was at 6.1%.

In October, the transition rate — mortgages transitioning from current to 30 days past due — dropped one basis point in one year to 0.7%. The serious mortgage delinquency rate (90 days or more past due, including loans in forbearance) dipped 19 basis points year over year to 2.2% in October.

CoreLogic’s chief economist Frank Nothaft, noted that loan modifications have helped reduce loans in serious delinquency. However, some borrowers are still facing severe financial challenges. “Nonetheless, there were about one-half million more loans in serious delinquency in October than at the start of the pandemic in March 2020.”