Mortgage Rates

Total Delinquency Fee Dropped Once more in June However Severe Delinquencies Stubbornly Excessive


The U.S. mortgage default rate fell to 4.4% in June, its lowest level in more than two decades and, according to data from CoreLogic, significantly from 7.1% in June 2020.

It was the 10th straight month that the overall mortgage default rate fell as U.S. homeowners remained resilient to the pandemic.

Early-stage defaults (loans 30 to 59 days past due) only made up about 1.1% of all loans, up from 1.8% in June 2020.

Loans that were 60 to 89 days past due accounted for 0.3%, down from 1.8% in June 2020.

Major defaults (90 days or more past due, including loans in foreclosure) accounted for 3% of all loans, up from 3.4% a year ago. Although the overall default rate has decreased, major defaults remain high.

At the end of June, the foreclosure inventory rate (the proportion of mortgages at a given stage in the foreclosure process) was 0.2% of all loans, up from 0.3% in June 2020.

It was the lowest foreclosure rate since CoreLogic began recording data in 1999.

CoreLogic notes that in June the state moratorium on foreclosure was extended to July 31st to give homeowners additional time to get back on track financially. As a result, the value for June is artificially low.

“The downward trend in defaults, particularly severe cases, is very encouraging – and testament to the impact of the significant economic recovery over the past six months, as well as government incentives, record-low mortgage rates and loan modification options,” said Frank Martell, President and CEO from CoreLogic, in a statement. “Providing resources to homeowners in need to educate them about the available government and private assistance will help reduce crime and foreclosure rates even further for the remainder of this year.”

Frank Nothaft, chief economist at CoreLogic, points out, however, that despite the economic recovery, “many families … remain in financial need”.

“By June, more than a million borrowers had missed six or more payments, tripling the number of borrowers before the pandemic,” notes Nothaft. “The CoreLogic analysis found that borrowers who were tolerated and in arrears with mortgage payments in June 2021 missed an average of 10 monthly payments.”

Photo: Pierre Bamin