In the company’s loan performance report for January, Frank Martell, CoreLogic’s
president and CEO said, “Except for the metropolitan areas affected by natural
disasters, most of the country has seen delinquency and foreclosure rates move
lower over the past year. Declines in
the unemployment rate have supported a rise in income and home-price growth has
built home equity. These two economic forces coupled with high-quality
underwriting have lowered overall delinquency rates.“
The national rate for loans that were 30 or more days
past due declined from 5.1 percent of active loans in January 2017 to 4.9
percent 12 months later, but that improvement would have been greater absent
the push higher from two states. Besides
being among the nation’s most populous, Texas and Florida bore the brunt of
last fall’s twin hurricanes and were the only two states where delinquencies
increased year-over-year. The delinquency
rate in Florida, which was 6.0 percent in January 2017 had risen to 8.4 percent
by this January’s report. In Texas the
year-over-year increase of 0.7 percentage point brought the rate to 6.3 percent.
The higher rates in those states are increasingly due to serious delinquencies.
While the national rate for loans more than 90 days past due but not in foreclosure
was 2.1 percent, down from 2.3 percent the prior January, the rate in Texas was
up 0.8 percent to 2.7 percent while in Florida it grew 1.9 point to 5.1
percent. However, in both states the
foreclosure inventory rate declined as it did nationally as well, moving from
0.8 percent in January 2017 to 0.6 percent in January 2018. Many lenders have
or had put foreclosure moratoria in effect after the storms.
CoreLogic’s chief economist Frank Nothaft said, “The
areas hit by last year’s hurricanes and wildfires are experiencing the “pig in
a python” effect on their local delinquency rates, a bulge in an otherwise level trend. This means that although early-stage delinquencies have largely
dropped back to normal, serious delinquency remains elevated. In hard-hit markets, like the Houston and
Naples metro areas, serous delinquency is triple what it was before the
hurricanes.” Nothaft noted that, in the San Juan area of Puerto Rico, not
included in national statistics, serious delinquency has quadrupled.
The effects of natural disasters are even more clearly seen on the metro
level. CoreLogic identifies 31 Core Based Statistical Areas (CBSAs) where the serious
delinquency rate increased. All but two are
in either Texas or Florida. The outliers were Fairbanks, which has been suffering
from the decline in oil prices, and Santa Rosa, California where a wildfire
last fall leveled much of the town. There the 30-day rate jumped a half-point to
2.4 percent while serious delinquencies rose from 0.7 percent to 1.0 percent
for the 12 months ended in January. In 11 other CBSA’s the serious delinquency
rate was unchanged.
CoreLogic also looks at transition rates that indicate the percent of
mortgages moving from one stage of delinquency to the next. The rate for those that
transitioned from current to 30-days past due was 0.8 percent in January 2018,
down from 1.1 percent in December 2017 and down from 0.9 percent in January
2017. By comparison, in January 2007, just before the start of the financial
crisis, the current-to-30-day transition rate was 1.2 percent and peaked in
November 2008 at 2 percent.