Mortgage

Mortgage defaults are falling to a pandemic low

While the number of non-performing mortgages fell to a pandemic low in November, sustainable improvements will not be achieved until the labor market grows, said Frank Nothaft, chief economist at CoreLogic.

"Forbearance and loan modification have helped families in trouble rebuild their finance houses in hard-hit locations," he wrote in the company's Loan Performance Insights report. "While vaccination will alleviate the pandemic, restoring income through job creation is the best tool against crime."

The CoreLogic report showed that November crime rates fell from 6.1% in the previous month to 5.9%, while they rose from 3.9% last year. The downward trend since the August high suggests more financial stability for consumers and a likely decline in distressed sales, Frank Martell, president and CEO of CoreLogic, said in the report.

With moratoria in place, the foreclosure rate has remained at 0.3% since April. The number decreased by 0.4% annually.

"People may be selling their homes, but you won't see the same level of short sales and foreclosures during the global financial crisis, considering how much equity people have," said Jeremy Sicklick, CEO and co-founder of HouseCanary. said in an interview.

Serious arrears – loans that are 90 days or more past due, including foreclosures – decreased from 4.1% in the previous month to 3.9%, and tripled the rate from 1.3% in November 2019. Mortgages that are due after 120 days , but were not yet closed off, also fell monthly from 3.3% to 3.1%, but increased from 1% in the previous year.

The proportion of early 30- to 59-day late payments was 1.4% m / m, while it decreased 2% year-over-year. The 60- to 89-day arrears interest rate remained unchanged from the previous month and year at 0.6%, although not every property market saw the same recovery in bad loans.

The three states with the highest foreclosure rates are unchanged from the previous month, with rates of 1.1% in New York and 0.8% in Hawaii and Maine. A total of 16 countries – compared to 14 in the previous month – had the lowest rate at 0.1%.

The three highest crime rates were also held as of October with Louisiana at 9.7%, Mississippi at 8.9% and New York at 8.5%. Idaho again had the lowest crime rate of 3.1%, while Montana, Wisconsin, and South Dakota came in second with 3.4%.

In addition to reducing crime rates, a heavy influx of jobs is a common denominator for metropolitan areas that are expected to outperform the rest of the country in home sales this year.

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