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Last updated on February 3rd, 2021 at 12:06 pm
According to CoreLogic’s most recent Loan Performance Insights Report, in spite of huge numbers of homeowners falling behind on their mortgages in Chicago and in other cities, forbearance measures are keeping foreclosures down.
CoreLogic’s most recent Loan Performance Insights Report showed forbearance measures are keeping foreclosures down even when large numbers of homeowners were falling behind on their mortgages in cities across the nation.
6.6% of mortgages were at least 30 days past due in August all over the country, meaning a 2.9% increase over the delinquency rates of August 2019, when 3.7% of all mortgages were delinquent. Those figures include homes in foreclosure.
The mortgages that were at least 90 days delinquent rose from 1.3% in August 2019 to 4.3% in August 2020 and includes homes in foreclosure.
These serious delinquencies hit their highest level since February 2014 and mortgages that are at least 150 days past due hit a historic high of 1.2%.
CoreLogic chief economist Dr. Frank Nothaft said in a press release, “Five months into the pandemic, the 150-day delinquency rate for August spiked to 1.2%.
This was the highest rate in more than 21 years and double the January 2010 peak during the home-price bust.
The spike in delinquency was all the more stunning given the generational low of 0.08% in March and April.”
Mortgages that are 30 to 59 days past due, were down from 1.8% in August 2019 to 1.6%.
These delinquencies dropped from 4.2% this April, due to the COVID-19 pandemic. Mortgages of 60 to 89 days past climbed up slightly year-over-year, from 0.6% in August 2019 to 0.8%.
The August 2020 foreclosure rate was 0.3%, down from 0.4% in August 2019.
Homeowners with federally backed mortgages forbearance, if are reaching the end of the grace period, can apply for an additional 180-day forbearance, but they will be accumulating the back payments.
All those unpaid payments, coupled with the pressures of decreased household incomes, could lead to a tremendous supply of home sales in 2021 that is triggered by financial distress after those forbearance periods close, anticipates CoreLogic.
Frank Martell, president, and CEO of CoreLogic said, “Forbearance programs continue to reduce the flow of homes into foreclosure and distressed sales and has been the key to helping many families who have been particularly hard hit by the pandemic.
Even though foreclosure rates are at a historic low, the spike in 150-day past-due loans points to bumpy waters ahead.
Reference Source: Chicago Agent Magazine
