Foreclosure- and default-related metrics have experienced lengthy, steady declines over the last six years since peaking in 2010 at the depth of the crisis. The industry is likely to see more of the same when CoreLogic releases its National Foreclosure Report for April 2016 this week on Tuesday, March 14.
Last month, CoreLogic reported that in March, seriously delinquent mortgages totaled just over 3 percent (1.2 million homes) while foreclosure inventory totaled just over 1 percent (427,000 homes). Both numbers in March were at their lowest level since 2007.
The major drivers of the decline have been tighter underwriting and lending standards, which has in turn resulted in fewer defaults, and home price appreciation and improved economic fundamentals have also played a role (May's weak jobs report notwithstanding).
Completed foreclosures—a true measure of homes lost to foreclosure—totaled 36,000 in March, which is 70 percent down from the peak of nearly 118,000 in September 2012 but still elevated above the pre-crisis monthly average of 21,000 from 2000 to 2006.
The number of completed foreclosures is likely to continue to drop as the backlog of homes in foreclosure inventory clears out (with some foreclosures taking years to complete) and the serious delinquency rate drops—the 36,000 completed foreclosures in March 2016 were a decline of about 6,000 from March 2015. Anand Nallathambi, president and CEO of CoreLogic, stated, “Longer term, as loans made since 2009 account for a larger share of outstanding debt, we anticipate that the serious delinquency rate will have further substantive declines.”