Foreclosure Inventory Cruising on at 11-Year Low

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The foreclosure inventory, that is the percentage of
loans in the process of foreclosure, appears to have stabilized at 0.6 percent
of all outstanding first mortgage loans. 
CoreLogic said on Tuesday that that the inventory has been unchanged at
that level
, the lowest since June 2007, since last August.  The number is down 1 basis point compared to April
2017.

The company’s monthly
Loan Performance Insights Report shows that, nationally, 4.2 percent of
mortgages were past due by 30 days or more in April, including loans in
foreclosure.  This is a 0.6 percentage
point decline in the overall delinquency rate compared with the previous April
when it was 4.8 percent.

The rate of early stage delinquencies,
loans that were 30 to 59 days past due, was 1.8 percent in April, compared to 2.2
percent a year earlier and the share in the next stage, mortgages that were 60
to 89 days delinquent, was 0.6 percent, unchanged year-over-year.  The serious delinquency rate, loans 90 days or
more past due, including loans in foreclosure, was 1.9 percent, down from 2.0
percent the previous April and the lowest for any April since 2007.  The rate then was 1.6 percent.

“Job growth, home-price
appreciation, and full-doc underwriting have pushed delinquency and foreclosure
rates to the lowest point in more than a decade,” said Dr. Frank Nothaft,
chief economist for CoreLogic. “The latest CoreLogic Home Price Index
report revealed the annual national home price growth was 7.1 percent in May,
the fastest annual growth in four years. U.S. employers have also continued to
employ more individuals, as employment rose by 2.4 million throughout the last
12 months with 213,000 jobs added last month alone. Together, this heightened
financial stability
is pushing delinquency and foreclosure rates to record
lows.” 

As early-stage
delinquencies can be volatile, CoreLogic also analyzes transition rates. The
share of mortgages that moved from current to 30 days past due was 0.8 percent
in April while a year earlier 1.2 percent of performing loans transitioned to
non-current.  By comparison, in January
2007, just before the start of the financial crisis, the current- to 30-day
transition rate was 1.2 percent.  That
statistic peaked in November 2008 at 2 percent. 

As a result of the 2017
hurricane season, Florida and Texas are the only states showing significant
gains in 90-day delinquency rates. According to the CoreLogic Storm Surge
Report, Florida has the most densely populated and longest coastal area and
thus the most exposure to storm surge flooding (compared to the 19 states
analyzed in the report) with more than 2.7 million at-risk homes across all five
storm categories.  Louisiana ranks second
with more than 817,000 at-risk homes. 
Texas, with more than 543,000 at-risk homes, is third. A major storm did
not strike Louisiana in 2017, but Florida and Texas are still recovering from
Hurricanes Irma and Harvey, respectively.

The states with the highest rates of
non-current loans in April were Mississippi at 7.7 percent and Louisiana at 7.1
percent. Florida has a 30-day rate of 6.7 percent, third highest in the nation.

“Delinquency rates
are nearing historic lows, except in areas impacted by extreme weather over the
past 18 months, reflecting a long period of strict underwriting practices and
improved economic conditions,” said Frank Martell, president and CEO of
CoreLogic. “Last year’s hurricanes and wildfires continue to affect
today’s default rates. The percent of loans 90 days or more delinquent or in
foreclosure are more than double what they were before last autumn’s hurricanes
in Houston, Texas and Naples, Florida. The 90-day-plus delinquent or
in-foreclosure rate has also quadrupled in Puerto Rico.”



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