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Economic uncertainty drove serious mortgage delinquencies, according to CoreLogic's Loan Performance Insights report. The report revealed 7.1% of mortgages were in some stage of delinquency, up 3.1% in the overall delinquency rate compared to June 2019.
June 2020 serious delinquencies, the most recent month for statistics, reached 3.4%, the highest serious delinquency rate since February 2015 and up 1.3% from June 2019, according to the report.
"Three months into the pandemic-induced recession, the 90-day delinquency rate has spiked to the highest rate in more than 21 years," said Frank Nothaft, chief economist at CoreLogic. "Between May and June, the 90-day delinquency rate quadrupled, jumping from 0.5% to 2.3%, following a similar leap in the 60-day rate between April and May."
The report states that mortgage loan performance has progressively weakened since the beginning of the pandemic. This has been driven by sustained unemployment, preventing homeowners from being able to escape the delinquency funnel.
"Forbearance has been an important tool to help many homeowners through financial stress due to the pandemic," said Frank Martell, president and CEO of CoreLogic. "While federal and state governments work toward additional economic support, we expect serious delinquencies will continue to rise — particularly among lower-income households, small business owners and employees within sectors like tourism that have been hard hit by the pandemic."