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Mortgage delinquency remains elevated in Triad

Mortgage delinquency remains elevated in Triad

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The percentage of Winston-Salem-area homeowners late on their mortgage payments was lower slightly in July, but still near a 4½-year high, CoreLogic reported Tuesday.

The rate was 6.8% in the Winston-Salem metropolitan statistical area of Forsyth, Davidson, Davie, Stokes and Yadkin counties. The rate was 7% in June and 4.8% in July 2019.

The report focuses on the delinquent-mortgage market, with “delinquent” defined as being at least 30 days overdue on payment.

The previous recent high mark was 7.3% in January 2016.

The delinquency rate continued to rise for mortgage payments more than 90 days past due, now up to 3.7% in July compared with 3% in June and 1.5% in July 2019. Both figures include houses in the foreclosure pipeline.

For the Greensboro-High Point MSA of Guilford, Randolph and Rockingham counties, the 30-day delinquency rate was 7.2 in July, down from 7.6% in June, but up from 5.1% a year earlier. The delinquency rate of more than 90 days was 4.3% in July, up from 3.5% in June and 1.7% a year ago.

The national real-estate research company had cautioned in June that the COVID-19-related economic shutdowns would cause payment delinquencies during the pandemic. Some lenders have offered forbearance to homeowners whose job was eliminated or furloughed.

The federal CARES Act provided forbearance for borrowers with federally backed mortgage loans who were economically impacted by the pandemic.

CoreLogic said borrowers in a forbearance program who have missed a mortgage payment are included in its delinquency statistics, even if the loan servicer has not reported the loan as delinquent to credit repositories.

As a result, CoreLogic said early-stage delinquencies (defined as 30 to 59 days past due) reached their highest level since 1999 during June.

“Four months into the pandemic, the 120-day delinquency rate for July spiked to 1.4%,” said Frank Nothaft, chief economist at CoreLogic.

“This was the highest rate in more than 21 years and double the December 2009 Great Recession peak. The spike in delinquency was all the more stunning given the generational low of 0.1% in March.”

Before the brunt of the coronavirus pandemic began to be felt in early March, economists were saying housing markets and lenders were benefiting from more homeowners being able to stay current on their monthly mortgage payments, in part because of refinancing to lower mortgage rates.

Officials with the Winston-Salem Regional Association of Realtors have cautioned that information about delinquency and/or underwater loans can affect the real-estate market by undermining consumer confidence, causing some hesitation in buying or trying to sell a house now and prompting an overreaction.

Attom Data Solutions reported Aug. 11 that the percentage of Winston-Salem area homeowners underwater on their mortgages dipped slightly from 8.7% in the first quarter to 8.5% in the second quarter.

Forsyth had 11,050 residences in that category. A mortgage is underwater when a homeowner owes more on the loan than the home is worth. Attom defines seriously underwater as owing at least 25% more on a mortgage than the property’s value.

By contrast, there were 17.9% in Winston-Salem area households, or 23,430, in the equity-rich category during the second quarter. That category includes households that own at least 50% of their residence.

The decision by mortgage lenders to suspend mortgage payments for certain households helped keep the seriously underwater percentage down during the second quarter.

The Greensboro-High Point MSA had 7.6%, or 10,517, residences, considered as underwater. The region also had 16.6%, or 22,888, in the equity-rich category.

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