What is '60-Plus Delinquencies'
60-plus delinquency rates are home loans that are more than 60 days past due on their monthly mortgage payments. 60-plus delinquency rates are typically expressed as a percentage of a group of loans written within a specified time period, such as a given calendar year. Another common grouping method are the interest rates for the pool of loans that make up a mortgage-backed security (MBS) or other securitized mortgage product.
60-plus delinquencies are less than 90 days past due, and have not yet entered the foreclosure process — loans in the latter status are expressed separately. The 60-plus rate may be split into one for prime loans and subprime loans. The 60-plus rate on subprime loans can be expected to be higher than for prime. Also, 60-plus rates are often published separately for fixed-rate versus adjustable-rate loans.
BREAKING DOWN '60-Plus Delinquencies'
The 60-plus delinquency rate is often added to another negative event measure, the foreclosure rate for the same group of loans. The two added together give a cumulative measure of the individual mortgages that are either not being paid at all, or being paid behind schedule.
If the rate on past-due and/or foreclosed mortgages rises beyond a certain level, the mortgage-backed security may have a shortfall of cash to pay out to investors. This can cause massive re-pricing of assets, resulting in some investors losing the majority of their invested capital.
Mortgage Delinquencies On Decline
A survey of national mortgage delinquencies prepared by global property information firm CoreLogic found that nationally, 4.9 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in January 2018. This represents a 0.2 percentage point decline in the overall delinquency rate, compared to a year earlier when it was 5.1 percent. The share of mortgages that were 60-89 days past due in January 2018 was 0.8 percent, unchanged from December 2017 and up from 0.7 percent in January 2017.
CoreLogic's CEO stated that so far in 2018 delinquency and foreclosure rates are lower than in 2017 in most of the country; the only exceptions were metropolitan areas affected by natural disasters such as Houston and Puerto Rico.