October 01, 2015

Job Issues Receding as Cause of Mortgage Delinquencies

Job Issues Receding as Cause of Mortgage Delinquencies

Approximately 38 percent of all mortgage delinquencies during the first half of 2015 were triggered by unemployment or the loss income, according to an analysis of mortgages owned or guaranteed by Freddie Mac.  That’s a major improvement compared to 2010 about 55 percent of the company’s delinquencies were tied to unemployment or loss of income.  This looks like more evidence that the housing market and the national economy are generally headed in the right direction.  However, it also shows job issues remain the single most significant factor behind mortgage delinquencies.

Meanwhile, too much debt (aka excessive obligations) have stayed relatively flat and accounted for about one-fifth of delinquencies in 2010 and the first half of 2015.  Property and market conditions were cited more often this year than in 2010, but still account for small percentages of late mortgage payments. Delinquencies tied to other life events – illness, death, marital issues – also show little difference in 2010 and 2015.

Hardship Reason for Mortgage Delinquency 2010  2015* 
Unemployment or curtailment of income  55%  38%
Excessive obligation  21%  21%
Illness or death in the family  8%  11%
Marital difficulties  4%  4%
Abandonment or issue with the property  0.4%  3%
Inability to sell or rent property  2%  2%
Other  10%  21%

*First & Second Quarters
Source: Freddie Mac

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