CFPB Launches New Mortgage Performance Trends Tool for Tracking Delinquency Rates
Newly Available Data Shows Lowest Mortgage Delinquency Rate Since the Financial Crisis
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today announced the launch of a new Mortgage Performance Trends tool that tracks delinquency rates nationwide. Information newly available through this tool shows that mortgage delinquency rates nationally are at their lowest point since the financial crisis. In addition to national data, the online tool features interactive charts and graphs with data on mortgage delinquency rates for 50 states and the District of Columbia at the county and metro-area level.
"Measuring the number of consumers who have fallen behind on their mortgage payments is a telling barometer of the health of mortgage markets locally and nationally," said CFPB Director Richard Cordray. "This rich information source identifies mortgage delinquency rates down to the county and metro-area level, making it a useful public tool."
With a combined value of roughly $10 trillion, mortgages make up the nation’s largest consumer credit market. A delinquent mortgage is a home loan for which the borrower has failed to make payments as required in the loan documents. If the borrower can't bring the payments on a delinquent mortgage current within a certain time period, the lender may begin foreclosure proceedings. Whether consumers can make their mortgage payments is an important sign of the health of the mortgage market and the overall economy. For instance, job growth, higher wages, and higher home values generally lead to fewer missed or late mortgage payments.
The Mortgage Performance Trends tool measures the delinquency rates in two general categories. The first category is comprised of borrowers who are 30 to 89 days behind on their mortgage payments, which generally means they have missed one or two payments. Tracking this rate can detect trends in the increase or decrease in the number of delinquencies, and act as an early warning sign for mortgage market developments that impact the overall economy. The second category is serious delinquencies, which is made up of borrowers who are more than 90 days overdue. If high, this rate reflects more severe economic distress.
The interactive charts and maps in the tool track monthly changes in both categories of delinquency rates starting in 2008, when the financial crisis was unfolding. Leading up to the crisis, some lenders originated mortgages to consumers without considering their ability to repay the loans. The decline in underwriting standards led to skyrocketing rates of mortgage delinquencies and foreclosures. As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB put in place rules to address the issues that helped trigger the crisis. These rules require lenders to assess a borrower’s ability to repay a mortgage before making the loan and require servicers to assist borrowers struggling to repay their mortgages. Mortgage delinquency data reflected in the Mortgage Performance Trends tool shows that among other things:
- Rates of serious delinquency are at the lowest level since the financial crisis: According to the data, the national rate of seriously delinquent mortgages peaked at 4.9 percent in 2010. As of March 2017, the rate had fallen to 1.1 percent, the lowest level since 2008. Colorado and Alaska have the fewest serious delinquencies, with 0.5 percent. New Jersey and Mississippi have the highest rates of delinquencies of more than 90 days, with 2.1 percent. For mortgages that are delinquent by less than 90 days, Mississippi has the highest rate, at 4.3 percent. Washington State has the lowest rate, at 1 percent.
- Most states hardest hit by the housing crisis have steadily recovered: At the peak of the financial crisis, both California and Arizona had rates of serious delinquencies of 7.5 percent and 7.6 percent, respectively, and both are now below 1 percent. Nevada, which peaked at 10.7 percent, now has a serious delinquency rate of 1.2 percent, nearly the same as the national average. Florida, which peaked at 9.0 percent, now has a rate of 1.4 percent.
Information in the Mortgage Performance Trends tool comes from the National Mortgage Database, which the CFPB and the Federal Housing Finance Agency launched in 2012. The database supports policymaking and research, and helps regulators better understand emerging mortgage and housing market trends. The National Mortgage Database includes information spanning the life of a mortgage loan from origination through servicing and captures a variety of borrower characteristics. It is a nationally representative sample of all outstanding, closed-end, first-lien mortgages for one-to-four family residences.
The Mortgage Performance Trends tool has many protections in place to protect personal identity. Before the CFPB or the FHFA receive data for the National Mortgage Database, all records are stripped of information that might reveal a consumer’s identity, such as names, addresses, and Social Security numbers.
The new Mortgage Performance Trends tool can be found at: https://www.consumerfinance.gov/data-research/mortgage-performance-trends
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.