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Loan Performance Showed Only Minimal Stress in March
Tuesday, June 9, 2020
The
strength of the housing industry at the end of 2019 and beginning of 2020 served,
to a certain extent, as a buffer as the COVID-19 pandemic began to hit in
March. However, CoreLogic says that there were still some signs that month that
loan performance was beginning to fray. The company's March Loan
Performance Insights Report says the share of mortgages that transitioned
from current to 30 days past due reached its highest level since 2013 as
unemployment began to rise. The transition rate increased to 1.0 percent from
0.9 percent in March 2019. In January
2007, just before the start of the financial crisis, the current- to 30-day
transition rate was 1.2 percent and it peaked in November 2008 at 2 percent.
CoreLogic says those effects will probably continue to
become more apparent over the next year - especially as home prices are
forecasted to experience their first decline in 9 years in 2021.
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