While overall mortgage defaults slowly subsided from the early pandemic highs, major defaults rose in July – especially loans that were due longer than 120 days, according to CoreLogic.
Loans defaulted after 120 days rose 2.4% in July, up from 1.1% in June and 1% a year earlier.
"This was the highest rate in more than 21 years and doubled the height of the Great Recession in December 2009," said Frank Nothaft, Chief Economist at CoreLogic. "The rise in crime was all the more astonishing given the generation low of 0.1% in March."
Serious arrears – loans that are 90 days or more past due, including foreclosures – rose 4.1%, the highest since April 2014, according to CoreLogic, compared to 3.8% in June and 1.3% in July 2019 . Serious arrears doubled annually in June and could double again by 2022 without further government action.
The general crime rate in July fell to 6.6% from 7.1% in June and 7.3% in May, but is well above the 3.8% rate in July 2019.
The early 30 to 59 day arrears rate continued to decline, increasing from 1.8% in June and last year to 1.5% in July. The 60- to 89-day arrears rate decreased from 1.8% m / m to 1% and increased from 0.6% year-over-year.
Economic instability, particularly in certain sectors and regions of the country, could add to the arrears for the foreseeable future.
"With the labor market volatile, many homeowners are feeling increasing pressure from unstable income and debt on personal savings buffers, increasing the risk of their mortgages defaulting," Frank Martell, president and CEO of CoreLogic told the report.
At the state level, New York had the highest crime rates and the highest crime rates in July at 10% and 7%, respectively. Louisiana followed closely with rates of 9.7% and 5.9%, New Jersey with 9.6% and 6.6% respectively. At the lower end of the spectrum, Idaho had the lowest crime rate of 3.4% and the serious crime rate of 1.8%, followed by 3.6% and 2% in South Dakota and 3.7% and 2.1% in Wisconsin.
The highest foreclosure rates were recorded in New York with 1.1%, Maine with 0.8% and Hawaii with 0.7%. In the meantime, 14 countries were the lowest with 0.1%.