More and more homeowners are falling behind on mortgage payments as the pandemic lingers, according to recent market data.
"Skipped mortgage payments across California are jumping to levels not seen since the mortgage mess surrounding the Great Recession," according to an article by Jonathan Lanser.
Statewide, "3.8% of home loans were in deep trouble compared with 0.6% a year earlier," reports Lanser, citing data of "seriously delinquent" home loans in August released recently by CoreLogic.
Home loans are delinquent in disparate geographic regions with fundamentally distinct market dynamics: Riverside and San Bernardino counties, Los Angeles and Orange counties, the San Francisco metropolitan area, and the San Jose metropolitan area. Lanser also notes that CoreLogic has identified the same trend around the country: "The nation’s rate was 4.3% — up from 1.3% in August 2019 and the highest rate of 'serious”' trouble since February 2014."
Still, experts cited in the article say the current risk of foreclosure is still well short of the foreclosures the state experience during the real estate crash of the Great Recession. "By CoreLogic’s count, Inland Empire [during the Great Recession] delinquencies topped 16% and neared 10% in Los Angeles-Orange County. In the Bay Area, late payments approached 7%," explains Lanser.
The likelihood that the current number of delinquencies could eventually rise to the levels of foreclosure experienced during the Great Recession is offset by several factors, like the actions of the Federal Reserve, regulation implemented since the last real estate meltdown, and a much larger reserve of equity, the last is expected to continue to grow over the course of the next year as eligible homebuyers look to upgrade with and take advantage of low interest rates.
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