Recent hurricanes and wildfires are likely to blame for an uptick in the number of homeowners who became late on their mortgage payments at the end of the year. Early-stage delinquencies—loan payments that are 30 to 59 days late—rose to 2.3 percent in December, according to CoreLogic’s latest data. For comparison, the rate was at 2.2 percent in December 2016.
“We see this happen every time there’s a natural disaster,” Jack McCabe, a real estate consultant in South Florida, told realtor.com®. “From storms and fires, people lose their jobs, they lose their houses, they lose their records. In many cases they don’t have a source of income for a period of months to be making their monthly mortgage payments, insurance, and taxes. The bank still wants to be paid even if you’re not able to live in your dwelling or you’ve lost your job.”
Foreclosures nationwide are running near decade lows. But the uptick in delinquencies may be an early sign of trouble ahead. About 5.3 percent of mortgages were 30 or more days past due or were in foreclosure in December, according to CoreLogic.
Notably, since the October wildfires, two- and three-month delinquency rates have risen in California’s Sonoma and Napa counties, says Frank Nothaft, CoreLogic’s chief economist.
“The aftereffects of Hurricanes Harvey, Irma, and Maria continue to appear as well,” Nothaft says. “Serious delinquency rates in the Houston and Miami metropolitan areas doubled between September and year-end.”
Florida had the highest percentage of homes that were 30 days or more past due, at 9.2 percent. Texas saw delinquencies at 6.8 percent, and California had 3 percent.
These homeowners may not be heading for foreclosure, though. Some owners may still be waiting on insurance payments, McCabe says.
Source: “In the Wake of Natural Disasters, Homeowners Struggle to Pay Their Mortgages,” realtor.com® (March 13, 2018)
