Friday, February 27, 2015

Loan Delinquencies Back to Pre-Crisis Levels

More home owners are keeping up with their mortgage payments. The delinquency rate for mortgage loans on residential properties fell to a rate of 5.68 percent of all loans outstanding at the end of the fourth quarter of 2014, according to the newly released Mortgage Bankers Association’s National Delinquency Survey. This marked the lowest level since the third quarter of 2007, MBA reports.
Read more: Loan Defaults Plunge to Pre-Recession Levels
The mortgage delinquency rate has fallen 71 basis points from just one year ago. The delinquency rate includes loans that are at least one payment past due; it does not include loans in the foreclosure process.
In the fourth quarter, the percentage of loans in the foreclosure process fell 12 basis points compared to the previous quarter, standing at 2.27 percent, MBA reports.
“Delinquency rates and the percentage of loans in foreclosure decreased for another quarter and were at their lowest levels since 2007,” says Marina Walsh, MBA’s vice president of industry analysis. “We are now back to pre-crisis levels for most measures.”
The foreclosure inventory has fallen every quarter since the second quarter of 2012. Forty-five states saw a decline in their foreclosure inventory rates during the fourth quarter, but judicial states continue to account for a disproportionately high share, Walsh notes. States that use a judicial foreclosure process have a foreclosure inventory rate that is about three times that of non-judicial states, she adds.
Overall, “we expect the improvement in mortgage performance to continue due to the improving economy and a strengthening job market, and the improved credit quality of recent vintages,” Walsh says.
Source: “Mortgage Delinquencies Continue to Decrease in Fourth Quarter,” Mortgage Bankers Association (Feb. 25, 2015)

Wednesday, August 20, 2014

Millennials Keep Current on Mortgage More Than Other Ages

Mortgage borrowers under the age of 30 have the lowest mortgage delinquency rate of any other age group, according to a newly released TransUnion mortgage report. However, the age group also makes up the smallest share of all mortgage accounts at 4.16 percent, TransUnion notes.
“It is encouraging to see younger borrowers perform well, since their generation was significantly impacted by the recession and their loans are among the newest,” says Steve Chaouki, head of financial services for TransUnion.
Overall, the mortgage delinquency rate – the percentage of borrowers 60 days or more delinquent on their mortgages – fell for the 10th consecutive quarter to 3.46 percent in 2014's second quarter, TransUnion reports. The mortgage delinquency rate has fallen nearly 20 percent in the past year.
The 50–59 age group has the largest share of mortgage accounts, at 27.09 percent. The breakdown by ages as of the second quarter of this year showing mortgage delinquency of 60 days or more are:
  • Under 30: 2.34%
  • 30-39: 3.91%
  • 40-49: 4.43%
  • 50-59: 3.46%
  • 60+: 2.58%
"Mortgage delinquency rates continue to drop and we are seeing this decline across all age groups," Chaouki says. "Overall, the improvements in the mortgage delinquency rate can be attributed to a number of factors. These include the clearing of severely delinquent accounts through foreclosure as well as a lower rate of new delinquencies from post-recession vintages, which generally are of significantly higher credit quality and have experienced much better performance than mortgages originated before the recession. This dynamic is likely driving the low delinquencies among younger borrowers.”
All 50 states, as well as the District of Columbia, posted declines in the mortgage delinquency rate in the past year. The major markets that saw some of the largest yearly drops in mortgage delinquency rates are:
  • San Francisco: -29.3%
  • Phoenix: -28.7%
  • Miami: -26.7%
  • Los Angeles: -24.1%
  • Chicago: -20.6%
Source: TransUnion

Friday, August 1, 2014

Foreclosure Inventory Falls 35%, Celebration Muted

Many markets across the country are seeing fewer foreclosures. That’s because foreclosure inventory has plunged 35 percent nationally from a year ago, but housing experts aren’t ready to say the foreclosure crisis is completely behind the nation quite yet.
Completed foreclosures fell 9.9 percent year-over-year, but on a month-to-month basis completed foreclosures ticked up 2.7 percent in June compared to May, according to CoreLogic’s June National Foreclosure Report, which provides a snapshot of completed foreclosures and the foreclosure inventory. There were 54,000 completed foreclosures in June – still elevated compared to historical averages of about 21,000 per month between 2000 and 2006.
In June, about 648,000 homes were in some stage of foreclosure, known as foreclosure inventory, compared to 1 million last year at this time, CoreLogic reports. Foreclosure inventory has fallen 35 percent year-over-year and the foreclosure inventory now makes up 1.7 percent of all homes with a mortgage. It represents the 32nd consecutive month for year-over-year declines.
“While 32 straight months of year-over-year decline in the foreclosure rate is cause for celebration, the total number of homes still in the foreclosure process remains almost four times as high as the average in the early 2000s,” says Mark Fleming, chief economist for CoreLogic. “Additionally, there is concern over whether or not we can maintain this pace of improvement as the foreclosure inventory becomes more concentrated in judicial states with lengthier, more complex processes and timelines.”
The five states with the highest foreclosure inventory (as percentage of all homes with a mortgage) in June were:
  • New Jersey: 5.7%
  • Florida: 5%
  • New York: 4.3%
  • Hawaii: 3.1%
  • Maine: 2.7%
Meanwhile, the following five states have the lowest foreclosure inventory (as percentage of homes with a mortgage):
  • Alaska: 0.4%
  • Nebraska: 0.4%
  • North Dakota: 0.5%
  • Minnesota: 0.5%
  • Wyoming: 0.5%
Source: CoreLogic

Thursday, July 24, 2014

Report: 17% of Homes Still Underwater

More home owners are gradually treading above water again on their mortgages, but some are still facing balances that are higher than the estimated value of their homes, according to RealtyTrac’s U.S. Home Equity & Underwater Report for the second quarter of 2014.
The percentage of residential properties still labeled “seriously underwater” on their homes was 17.2 percent in the second quarter, down from 26 percent a year ago and marking the lowest level since RealtyTrac began reporting negative equity in the first quarter of 2012. RealtyTrac defines “seriously underwater” as home owners who owe at least 25 percent or more on the estimated market value of their home.
Still, the road back to equity for many home owners has slowed recently in several markets.
“Home price appreciation has slowed in the last few months in many of the markets with the most underwater homes, slowing the pace at which home owners are recovering equity lost during the Great Recession,” says Daren Blomquist, vice president at RealtyTrac. “For instance home price appreciation in California was at 16 percent in May 2014 compared to a high of 31 percent in July and August of 2013. In Arizona, home price appreciation has slowed to 6 percent annually compared to a high of 24 percent last year. In addition many of the properties that are seriously underwater are in a deep negative equity hole that will take some time to dig out of.”
The average loan-to-value on the 9.1 million homes seriously underwater was 133 percent, and the average loan-to-value on the homes in foreclosure that are seriously underwater was 134 percent, Blomquist notes.
That said, more home owners are on the verge of regaining equity in their homes this year. About 8.8 million properties are on the verge of resurfacing in the second quarter, with between 10 percent negative equity and 10 percent positive equity, according to RealtyTrac’s report. This represents 17 percent of all properties with a mortgage, up from 16 percent or 8.5 million properties with a mortgage in the first quarter of this year.
Meanwhile, about 9.9 million – or 18.8 percent of properties with a mortgage – are equity-rich, meaning the home owners have at least 50 percent equity in their properties. The percentage held steady from the first quarter of this year. The highest percentage of equity-rich properties were in San Francisco (37%); Honolulu (36%); Los Angeles (32%); and New York (29%).
Fewer distressed properties have negative equity, with 44 percent of all properties in the foreclosure process seriously underwater, down from 57 percent a year ago, according to RealtyTrac. Indeed, 34 percent of foreclosures had positive equity in the second quarter, with the top states for foreclosures with equity in Colorado, Texas, Oklahoma, Hawaii, and Louisiana.
5 Markets with the Most Underwater Properties
The markets with the highest percentage of properties that were seriously underwater in the second quarter are:
  1. Nevada (32%)
  2. Florida (30%)
  3. Illinois (30%)
  4. Rhode Island (29%)
  5. Michigan (27%)
6 Metros with the Most Resurfacing Equity
Meanwhile, the markets with most resurfacing equity (in which properties are between negative 10 percent and positive 10 percent) are:
  1. Colorado Springs, Colo., (28%)
  2. Albuquerque N.M. (22%)
  3. Lancaster, Pa. (22%)
  4. El Paso, Texas (22%)
  5. Salt Lake City (22%)
  6. Worcester, Mass. (22%)
Source: RealtyTrac

Friday, July 18, 2014

Foreclosure Timelines Grow Even Longer

The foreclosure process is growing even longer across the country. In the second quarter of 2014, foreclosures took an average of 577 days to complete. That’s up 10 percent from the 526-day national average in the second quarter of 2013, according to RealtyTrac’s Midyear 2014 U.S. Foreclosure Market Report.
The state with the longest average time to foreclose was New Jersey, at 1,098 days.
Other states with some of the longest foreclosure processing times included New York (930 days); Florida (925 days); Hawaii (915 days); Illinois (850 days); and Massachusetts (784 days).
The lengthy timelines have been blamed on an upswing in “zombie foreclosures” that have been haunting the market. The term was coined to describe properties where the foreclosure process has been started and the home owner has vacated, but the foreclosure was never completed. Zombie foreclosures account for one in every five foreclosures nationally, according to RealtyTrac, with the highest number in New York, New Jersey, Illinois, and Ohio.
While nationwide foreclosure timelines lengthened, 17 states did speed up their foreclosure process during the second quarter compared to previous quarters. Those states include Minnesota (where average foreclosure times are down 20%), Texas (down 17%), Maryland (down 17%), Georgia (down 11%), New York (down 10%), and California (down 7%).
Meanwhile, the average time to foreclose was shortest in Delaware, where it took an average of 169 days for home owners to wind through the foreclosure process. Texas was next at 173 days, followed by Alaska at 185 days and Minnesota at 192 days.
Source: RealtyTrac

Thursday, July 17, 2014

Decline in Foreclosures Reaches 'Important Milestone'

Foreclosure activity in June was down 16 percent from a year prior, marking the lowest level since July 2006 — before the housing bubble burst — according to RealtyTrac's Midyear 2014 U.S. Foreclosure Market Report. The report showed a much-improved picture: Foreclosure filings, which include default notices, scheduled auctions, and bank repossessions, were down 19 percent in the first half of 2014 compared to the previous six months and 23 percent from year-ago levels.
Ten states in June reached their lowest level of foreclosures since 2006, including Texas, Georgia, Colorado, Tennessee, Arizona, and Nevada.
"Nationwide foreclosure activity in June reached an important milestone, dropping to levels not seen since before the housing-price bubble burst in August 2006," says Daren Blomquist, vice president at RealtyTrac. "Over the next six to nine months, nationwide foreclosure numbers should start to flatline at consistent historically normal levels."
Not all states are out of the woods yet. For example, nine states saw foreclosure activity rise during the first half of 2014 compared to a year ago, such as New Jersey (up 54%); Maryland (up 18%); Iowa (up 10%); Massachusetts (up 4%); and Connecticut (up 4%). The states with the highest foreclosure rates in the first half of 2014 remained Florida, Maryland, Illinois, New Jersey, and Nevada, according to the report.
"While it's important that any remaining foreclosure infection is addressed promptly to keep it from festering, foreclosures are no longer a widespread contagion threatening to derail the housing market's return to full health," Blomquist says.
The metros with some of the largest decreases in foreclosure activity in the first half of 2014 compared to a year ago included Chicago (down 30%); Miami (down 30%); Houston (down 29%); Dallas (down 28%); and Los Angeles (down 20%).
Source: RealtyTrac

Tuesday, July 8, 2014

CoreLogic reports 47,000 completed foreclosures in May

According to CoreLogic's just-released May National Foreclosure Report, there were 47,000 completed foreclosures nationally in May 2014, down from 52,000 in May 2013, a year-over-year decrease of 9.4 percent. CoreLogic provides data on completed U.S. foreclosures and foreclosure inventory.
On a month-over-month basis, completed foreclosures – the total number of homes actually lost to foreclosure – were up by 3.8 percent from the 45,000 reported in the revised April 2014 report. As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
Since the financial crisis began in September 2008, there have been about 5 million completed foreclosures across the country.
As of May 2014, about 660,000 homes in the U.S. were in some stage of foreclosure, known as the foreclosure inventory, compared to 1 million in May 2013, a year-over-year decrease of 37 percent. The foreclosure inventory as of May 2014 represented 1.7 percent of all homes with a mortgage, compared to 2.6 percent in May 2013. The foreclosure inventory was down 4.8 percent from April 2014, representing 31 months of consecutive year-over-year declines.
"Significant gains have been made in the last year to reduce the foreclosure stock," said Mark Fleming, chief economist for CoreLogic. "Yet, these improvements are occurring disproportionately in non-judicial states. The foreclosure inventory in judicial states is averaging 2.1 percent, which is more than twice the 0.9 percent average that is occurring in non-judicial states."
"The pace of completed foreclosures slowed in May compared to last month but I expect this to be a temporary respite," said Anand Nallathambi, president and CEO of CoreLogic. "There is still much more hard work to do to clear the backlog of foreclosed properties. Although difficult, we need to continue to aggressively clear distressed homes to ensure the return of a healthy housing market."
Highlights as of May 2014:
-- Every state posted double-digit year-over-year declines in completed foreclosures.
-- Thirty-eight states show declines in year-over-year foreclosure inventory of greater than 30 percent with Arizona, Utah, Nebraska and Minnesota experiencing declines greater than 50 percent.
-- The five states with the highest number of completed foreclosures for the 12 months ending in May 2014 were: Florida (122,000), Michigan (44,000), Texas (39,000), California (34,000) and Georgia (32,000). These five states account for almost half of all completed foreclosures nationally.
-- The five states (including the District of Columbia) with the lowest number of completed foreclosures for the 12 months ending in May 2014 were: the District of Columbia (71), North Dakota (334), West Virginia (515), Wyoming (710) and Alaska (856).
-- The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: New Jersey (5.8 percent), Florida (5.2 percent), New York (4.3 percent), Hawaii (3.1 percent) and Maine (2.8 percent).
-- The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Alaska (0.3 percent), Nebraska (0.4 percent), North Dakota (0.4 percent), Wyoming (0.4 percent) and Minnesota (0.5 percent).
Methodology: The data in this report represents foreclosure activity reported through May 2014. The foreclosure inventory is measured only against homes that have an outstanding mortgage. Homes with no mortgage liens can never be in foreclosure and are, therefore, excluded from the analysis. About one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data.
Source: Florida Realtors®