Mortgage Delinquencies Are Up Since July 2020
There is the perception that the housing market is strong, and that foreclosures are down—at least, down from the levels that they were during the foreclosure crisis. And while the COVID-19 crisis has brought news of economic catastrophe, there hasn’t been a lot of news about widespread foreclosures.
That’s in part to restrictions or moratoriums on foreclosures that kept the courts from being inundated with foreclosure filings. But there’s another measure of the health of the housing market other than filed foreclosure cases—delinquencies. When someone goes delinquent on their mortgage, a foreclosure isn’t immediately filed.
That means that the measures of delinquencies could be a better indicator of the housing market’s health—and an indicator of whether another foreclosure crisis could be on the horizon.
Delinquency rates are rising. According to one report by Business Wire, from July to October 2020, the number of delinquencies rose about 3% (which is a lot, considering the number of mortgages).
Delinquency statistics are usually broken down between early delinquencies—people who are about 30-59 days behind on their mortgage—and serious delinquencies, which is being 90 days or more past due.
As of July 2020, early delinquencies were found to have decreased by about 4%. That sounds like good news. However, serious delinquencies were at about 4%, and in fact, the country is facing the highest delinquency rate since it had in 2014.
That’s not the only delinquency record caused by the pandemic. By July 2020, the 120-day delinquency rate was at the highest level it had been in over 20 years.
The states with the highest increases in delinquencies from last year are Florida, Nevada, New Jersey, Hawaii, and New York.
Other Factors That Affect Delinquencies
Foreclosures are usually caused by unemployment. And unemployment is up, especially in harder hit areas. Conversely though, and one difference between the housing crash of the 2000s, is that houses have retained their value.
That means that a lot of people could stand to lose homes that have value, should these delinquencies turn into foreclosures. It also means that a lot of people may be cash poor with houses that have value.
Getting Bankruptcy Help
If these delinquencies turn into foreclosures, borrowers may want to look to bankruptcy options to assist them. While certain kinds of bankruptcies can help with a foreclosure, others are not permanent solutions. If you are delinquent or facing foreclosure, you may want to come in for a bankruptcy consultation.
By getting a consultation, you will at least know that if you need to file a bankruptcy, the option is available to you. Additionally, if you are delinquent, the ability to cure your delinquency through a Chapter 13 bankruptcy can be easier if you are not in serious delinquency.