Mortgage Late Payments at Record Low Levels
CoreLogic released its Loan Performance Insights report for February last week and I want to highlight this report since it's B.C. (Before Coronavirus) to remind us of how strong the mortgage market and real estate market was before this event. These are national numbers.
- The 30 day or more delinquency rate was just 3.6% in February, down from 4% in February 2019. This was the lowest percentage in a generation.
- Only 0.4% of all mortgages were in foreclosure in February. This is the lowest foreclosure rate since January 1999. This means only 1 out of 250 homes with a mortgage were in foreclosure across the country. And about 40% of all properties are owned free and clear.
- Only 1.6% of all mortgages were 90 days or later or considered Seriously Delinquent.
- Metro Denver's Seriously Delinquent rate was a minuscule 0.4%, the 2nd lowest rate in the country after the Bay Area. And our foreclosure rate is just 0.1%, meaning that only 1 in 1000 homes with a mortgage are in foreclosure.
Distressed sales such as foreclosures are what caused home prices to drop 25% in Metro Denver back in 2007-2009. For perspective, Colorado's foreclosure rate was over 2% from early 2008 through the end of 2011. And our Serious Delinquency rate first went over 2% in the 4th quarter of 2005 and went as high as 6% at the end of 2009. This was a primary factor why home prices dropped then.