CoreLogic’s December 2020 loan performance report was upbeat, citing positive signs of recovery after a difficult year in which a pandemic and related job losses spiked delinquency rates. Last year started off with the lowest share of loans that are 30 days or more past due since the company began collecting data in 1999. Then, as COVID-19 spread with shelter-in-place guidelines, the rate doubled from 3.6 percent of all mortgages in March to 7.3 percent. Over time, these early-stage failures passed in serious category 90 days or more late, quadruple the size of that bucket by August to 4.3 percent.

In December, non-current loans, including those in foreclosure, were 5.8%. This is still 2.1 percentage points more than in December 2019, but the national rate has been declining since June. The number of loans at the earliest stage of delinquency, from 30 to 59 days, was lower than in the previous year, 1.4 percent compared to 1.8 percent. The next step, 60 to 89 days late, AKA, adverse delinquency, fell 0.1 point year-on-year to 0.5%.

Serious defaults are still high at 3.9% and this percentage has remained unchanged from November. A year earlier, the rate stood at 1.2%. The share of mortgages at some stage of foreclosure is 0.3 percent.

The share of mortgages that went from a current default to an early stage in December was 0.8%. This is the same transition rate as in December 2019.

“Places that have experienced significant job losses over the past year have also experienced big jumps in mortgage arrears“said Frank Nothaft, chief economist at CoreLogic.” By state, Hawaii and Nevada experienced the largest 12-month increase in delinquency rates, both up 4.1 percentage points. They also saw sharp increases in unemployment rates, up 6.6 percentage points in Hawaii and 5.5 percentage points in Nevada, compared to 3.1 percentage points for the United States. ”