More Mortgage Delinquencies in the Wake of Hurricane Florence

Data from August, 2018 is in, and results show the lowest number of mortgage delinquencies nationwide since the year 2000.

These new figures temper the less rosy news that came out of the mortgage industry earlier in the summer, when it was widely reported that foreclosure starts were on the rise for the first time in three years. Houston, which was hit by serious flooding from Hurricane Harvey, experienced an almost 300 percent year-over-year increase in foreclosure starts for the months May, June, and July combined.

A Snapshot Look at the Latest Data

Both delinquencies and foreclosure starts were down significantly in a year-over-year comparison with August, 2017. Not only are delinquencies down 5.7 percent over the last two months; delinquencies from the 2017 hurricane season continue to decline as well, with only 25,100 remaining on the U.S. mainland.

The number of properties with mortgages that are 30 days or more delinquent has fallen approximately 10 percent since August, 2017, while the total U.S. foreclosure pre-sale inventory rate fell a whopping 28.17 percent in the same time frame.

Foreclosures starts are down as well, an impressive 12.25 percent decrease since the end of August last year. The foreclosure sales rate increased 15.17 percent from the previous month but declined 7.35 percent in a year-over-year comparison.

The Takeaway

Foreclosures and delinquencies are at an 18 year low in the nation as a whole. However, all things being equal, the mortgage industry can expect a repeat of 2017-18 cycle of delinquency and recovery in the wake of Florence. The scope of the storm damage is potentially great: Approximately 391,000 mortgaged homes lay in the hurricane’s evacuation area, with roughly 283,000 in the 18 North Carolina counties FEMA declared disaster areas.

Once damage totals come in, there will almost certainly be an increase in both delinquencies and foreclosure starts.

There is a possibility, however, that all things won’t be equal. Several key indicators suggest that the housing market is softening. Wages have not kept pace with rising home prices nationwide; at the same time, lending and underwriting practices became less stringent in 2018, meaning that new homeowners could be vulnerable. There is also some indication that new construction is catching up to demand, which could lower home prices across the board. The recovery from Florence could, in fact, be tougher than expected.

About Peak Foreclosure

Designed to support and meet the needs of a diverse clientele, Peak Foreclosure Services, Inc. assists banks, private investors, servicers, and sub-servicers in navigating the complex regulatory environment that comes with the industry. Our detail-oriented specialists process non-judicial foreclosures in select U.S. states, including Arizona, California, Idaho, Montana, Nevada, North Carolina, and Washington. We have affiliates nationwide.