Information from a newly launched assessment tool shows that mortgage delinquency rates have dropped to levels not seen since before the recession, the Consumer Financial Protection Bureau said.
According to the CFPB’s newly launched Mortgage Performance Trends tool, the national rate of seriously delinquent mortgages peaked at 4.9 percent in 2010. As of March 2017, the rate had fallen to 1.1 percent, the lowest level since 2008.
That recovery extends to the recession’s hardest hit states. At the peak of the financial crisis, both California and Arizona had rates of serious delinquencies of 7.5 percent and 7.6 percent, respectively, and both are now below 1 percent. Nevada, which peaked at 10.7 percent, now has a serious delinquency rate of 1.2 percent, nearly the same as the national average. Florida, which peaked at 9.0 percent, now has a rate of 1.4 percent.
Launched Oct. 30, the CFPB’s tool measures the delinquency rates in two general categories. The first category is comprised of borrowers who are 30 to 89 days behind on their mortgage payments, which generally means they have missed one or two payments. Tracking this rate can detect trends in the increase or decrease in the number of delinquencies, and act as an early warning sign for mortgage market developments that impact the overall economy. The second category is serious delinquencies, which is made up of borrowers who are more than 90 days overdue. If high, this rate reflects more severe economic distress.
“Measuring the number of consumers who have fallen behind on their mortgage payments is a telling barometer of the health of mortgage markets locally and nationally,” said CFPB Director Richard Cordray. “This rich information source identifies mortgage delinquency rates down to the county and metro-area level, making it a useful public tool.”
Information in the Mortgage Performance Trends tool comes from the National Mortgage Database, which the CFPB and the Federal Housing Finance Agency launched in 2012. The database supports policymaking and research, and helps regulators better understand emerging mortgage and housing market trends.
The National Mortgage Database includes information spanning the life of a mortgage loan from origination through servicing and captures a variety of borrower characteristics. It is a nationally representative sample of all outstanding, closed-end, first-lien mortgages for one-to-four family residences.