Skip to content
SuperMoney logo
SuperMoney logo

Top 5 Influential Factors in 60-Plus Delinquencies: A 2022 Perspective

Last updated 04/10/2024 by

Abi Bus

Edited by

Fact checked by

60-Plus Delinquencies refer to instances where borrowers are more than 60 days late on their payments, particularly in mortgage loans. This article explores the causes, impacts, and trends of such delinquencies, providing insights into the financial landscape.

Compare Home Loans

Compare rates from multiple vetted lenders. Discover your lowest eligible rate.
Compare Rates

What is the most expensive [Topic] in the world?

    1. Policy changes: Changes in government regulations or lending standards can significantly influence mortgage delinquency rates. For example, alterations in lending criteria may restrict access to credit for certain borrowers, leading to higher delinquency rates among those affected. Similarly, policy adjustments aimed at foreclosure prevention or mortgage assistance programs can impact the overall delinquency landscape by providing relief to struggling homeowners or imposing stricter requirements for mortgage assistance eligibility.
    2. Property devaluation: Declines in property values can have profound effects on mortgage delinquency rates. When the value of a property falls below the outstanding mortgage balance, homeowners may find themselves in a situation known as negative equity or underwater mortgage. In such cases, borrowers may be less motivated to continue making mortgage payments, especially if they perceive their investment as financially untenable. Property devaluation can also exacerbate delinquency rates by reducing homeowners’ ability to refinance their mortgages or access equity through home equity loans or lines of credit.
    3. Job loss and income reduction: Unemployment or reduced income levels can significantly strain borrowers’ finances, leading to difficulties in meeting mortgage obligations. During economic downturns or periods of instability, layoffs, downsizing, or company closures may result in widespread job losses, leaving many individuals without a reliable source of income. As a consequence, mortgage delinquency rates tend to rise as affected borrowers struggle to prioritize essential expenses and manage their debt obligations. The loss of employment or reduction in income can also impede borrowers’ ability to qualify for mortgage modifications or repayment plans, further exacerbating delinquency issues.
    4. Subprime mortgage loans: Subprime mortgage loans, characterized by higher interest rates and extended to borrowers with poor credit histories, pose a significant risk of default and foreclosure. These loans are often offered to individuals with low credit scores or limited financial resources, making them more vulnerable to economic downturns or unforeseen financial hardships. Subprime borrowers may face challenges in meeting their mortgage payments due to the burden of high-interest rates, which can consume a larger portion of their income. Additionally, subprime loans may feature adjustable interest rates or balloon payments, further complicating borrowers’ ability to manage their debt obligations and increasing the likelihood of delinquency.
    5. Economic downturns: Periods of economic recession or instability can exert considerable pressure on borrowers’ ability to repay their loans, resulting in increased delinquency rates. Economic downturns are often accompanied by rising unemployment, reduced consumer spending, and declining property values, creating a challenging financial environment for homeowners. As household incomes shrink and job opportunities become scarce, many individuals may struggle to keep up with mortgage payments, leading to higher levels of delinquency and foreclosure. Moreover, economic downturns can weaken consumer confidence, making it harder for borrowers to sell their homes or refinance their mortgages to alleviate financial burdens.
By ranking these factors from lowest to highest, readers can better understand the various contributors to mortgage delinquencies and their relative significance in shaping the overall landscape of housing financea

How 60-Plus Delinquencies are valued

Economic conditionsEconomic indicators such as unemployment rates, GDP growth, and housing market trends influence the prevalence of 60-plus delinquencies.
Interest ratesChanges in interest rates affect borrowers’ affordability and mortgage repayment capacity, impacting delinquency rates.
Policy environmentGovernment policies related to mortgage lending standards, foreclosure prevention programs, and consumer protection laws shape delinquency trends.
Consumer behaviorFactors such as household debt levels, savings rates, and financial literacy influence borrowers’ ability to manage their mortgage obligations.

Pro Tip

Understanding the underlying causes of mortgage delinquencies is crucial for lenders and policymakers to implement effective risk management strategies.” – John Smith, Senior Economist

Why is the 60-Plus Delinquencies so expensive

60-Plus Delinquencies are a result of various factors, including:

Will it continue to appreciate?

The future trajectory of 60-plus delinquencies depends on several factors, including economic conditions, government policies, and consumer behavior.
Here is a list of the benefits and the drawbacks to consider.
  • Provides insights into economic health
  • Helps identify areas for policy intervention
  • Allows lenders to assess credit risk
  • Indicates financial stress for borrowers
  • May lead to increased foreclosure rates
  • Can negatively impact investor confidence

Frequently asked questions

What are 60-Plus Delinquencies?

60-Plus Delinquencies refer to instances where borrowers are more than 60 days late on their mortgage payments.

What causes 60-Plus Delinquencies?

Factors contributing to 60-plus delinquencies include economic downturns, job loss, property devaluation, and policy changes.

How do 60-Plus Delinquencies impact the economy?

High levels of 60-plus delinquencies can destabilize financial markets, increase foreclosure rates, and hinder economic recovery.

Key takeaways

  • 60-Plus Delinquencies indicate borrowers’ inability to meet mortgage payments, influenced by economic factors and policy changes.
  • Understanding the causes and trends of 60-plus delinquencies is crucial for lenders, policymakers, and investors.
  • Economic conditions, interest rates, policy environment, and consumer behavior shape the prevalence of 60-plus delinquencies.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

Loading results ...

You might also like