by Bill McBride on 12/25/2014 06:39:00 PM
Thursday, December 25, 2014
Freddie Mac reported yesterday that the Single-Family serious delinquency rate was unchanged in November at 1.91%. Freddie's rate is down from 2.43% in November 2013, and the rate in October and November was the lowest level since December 2008. Freddie's serious delinquency rate peaked in February 2010 at 4.20%.
The serious delinquency had declined every month since December 2012 (when it was also unchanged).
These are mortgage loans that are "three monthly payments or more past due or in foreclosure".
Note: Fannie Mae will report their Single-Family Serious Delinquency rate for November next week.
Click on graph for larger image
Although the rate is generally declining, the "normal" serious delinquency rate is under 1%.
The serious delinquency rate has fallen 0.52 percentage points over the last year - and at that rate of improvement, the serious delinquency rate will not be below 1% until late 2016.
Note: Very few seriously delinquent loans cure with the owner making up back payments - most of the reduction in the serious delinquency rate is from foreclosures, short sales, and modifications.
So even though distressed sales are declining, I expect an above normal level of Fannie and Freddie distressed sales for perhaps 2 more years (mostly in judicial foreclosure states).