Mortgage bankers saw a ray of hope as mortgage delinquency rates declined from the second to the third quarter of 2020. An improved, more open economy seemed to generate more on-time payments. Loans with missed payments over 30 days and over 60 days drove the overall delinquency rate down. However, loans delinquent for 90 or more days increased from Q2 to Q3. Homeowners with those loans are benefitting from forbearance plans and foreclosure moratoriums at least until year’s end. So, the not-so-late loans (2.88 percent of all mortgages) improved but the heading-for-the-cliff loans (4.78 percent of all mortgages) got worse. With all missed payments coming due when forbearance plans and foreclosure moratoriums expire, bankers and lawyers will be sharpening their pencils. Further to the point, quarterly dips don’t a trend make. Year-over-year figures show a distinct pandemic impact where the overall, seasonally adjusted Q3 mortgage delinquency rate nearly doubled from 3.97 percent to 7.65 percent. That’s the primary pandemic impact.
Source: Mortgage Bankers Association.
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