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42 | M R EP O RT SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T Mortgage Delinquencies Retreat to Pre-Pandemic Levels A recent analysis has found that delinquency rates 30 days or more past due are sliding, but nearly one million homeowners remain at least six months behind on payments. C oreLogic's latest Loan Performance Insights Report, measuring data for July 2021, has found that 4.2% of all mortgages in the U.S. were in some stage of delinquency, representing a 2.3-percentage point decrease in delinquency compared to July 2020, when it was 6.5%. While overall delinquencies remain above the February 2020, pre- pandemic rate of 3.6%, this is the lowest rate since last March. The study defines delinquency as mortgages 30 days or more past due, including those in foreclo- sure. In July 2021, the U.S. delin- quency and transition rates, and their year-over-year changes, were as follows: • Early-Stage Delinquencies (30 to 59 days past due): 1%, down from 1.5% in July 2020. • Adverse Delinquency (60 to 89 days past due): 3%, down from 1% in July 2020. • Serious Delinquency (90 days or more past due, including loans in foreclosure): 8%, down from 4.1% in July 2020. While still high, this is the lowest serious delinquency rate since May 2020. • Foreclosure Inventory Rate (the share of mortgages in some stage of the foreclosure process): 2%, down from 0.3% in July 2020. This is the lowest foreclosure rate recorded since CoreLogic began recording data (1999). • Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 6%, down from 0.8% in July 2020. "Declining delinquency levels are an encouraging sign of eco- nomic improvement and the dura- bility of the housing market," said Frank Martell, President and CEO of CoreLogic. "Looking ahead to the end of many forbearance and other assistance programs, many borrowers receiving support must consider their financial options, including a potential loan modifi- cation, to ensure they stay current and keep foreclosures at bay." According to the latest estimate from the Mortgage Bankers Association (MBA), approximately 1.3 million homeowners are cur- rently in forbearance plans. While we continue to see serious delinquencies improve, approximately one million people nationwide have been unable to make payments for at least half a year, said the CoreLogic report. The share of borrowers six months or more past due made up about one-half of the total delinquencies in July, with many still leaning on options such as forbearance, loan modifications and other government provisions to keep from entering foreclosure. In July, all U.S. states logged a decrease in annual overall delin- quency rates, with New Jersey (down 3.9 percentage points), Florida (down 3.5 percentage points), and Nevada (down 3.3 percentage points) leading with the largest declines. "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 Dr. Frank Nothaft, Chief Economist at CoreLogic. "Homeowners with substantial home equity are far less likely to experience a fore- closure 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." CoreLogic found that all U.S. metros also posted an annual de- crease in overall delinquency rates in July, with Miami (down 5.4 percentage points), Laredo, Texas (down 5.1 percentage points), and Kingston, New York (down five percentage points), posting the largest decreases. Nevertheless, elevated overall delinquency rates remain in some metros, including Odessa, Texas (11%); Pine Bluff, Arkansas (10.6%); and Laredo, Texas (10.5%).