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38 FORECLOSURE ACTIVITY'S UPS AND DOWNS U.S. foreclosure activity in Q 3 2019 was 49% below the pre-recession average of 278,912 properties with foreclosure filings per quarter between Q1 2006 and Q 3 2007—the 12th consecutive quarter where U.S. foreclosure activity has registered below the pre-recession average. According to the ATTOM Data Solutions Q 3 2019 U.S. Foreclosure Market Report, there were a total of 143,105 U.S. properties with foreclosure filings in Q 3, down 6% year- over-year. "Foreclosure activity continues to decline across the country, which is a good sign that the housing market and the broader economy remain strong—and that the lending excesses that helped bring down the economy during the Great Recession remain a memory," said Todd Teta, Chief Product Officer at ATTOM Data Solutions. "is is not to say that everything in the latest foreclosure picture is rosy. Some states have seen their foreclosure rates increase this year, which could cause some concern. But overall, the foreclosure numbers reflect a market in which buyers can afford their homes and lenders remain careful in loaning to home buyers who have little chance of repaying." Running contrary to the national trend, 14 states posted year-over-year increases in foreclosure starts in Q 3 2019, including Montana (up 33%); Georgia (up 32%); Washington (up 16%); Louisiana (up 15%); and Michigan (up 12%). By state, the highest foreclosure rates were in Delaware (one in every 415 housing units with a foreclosure filing); New Jersey (one in every 436); Maryland (one in every 500); Illinois (one in every 517); and Florida (one in every 577). By metro, the top two with the highest foreclosure rates were in New Jersey: Atlantic City (one in every 269 housing units with a foreclosure filing) and Trenton (one in every 312). On a national level, despite the reduced foreclosure rates, bank repossessions saw a slight uptick in Q 3. Lenders repossessed 34,432 U.S. properties through REO in Q 3 2019, up 6% from the previous quarter but down 33% from a year ago. However, 16 states posted quarter-over-quarter decreases in REO activity in Q 3 2019, including Maryland (down 37%); Tennessee (down 19%); Delaware (down 16%); New Jersey (down 13%); and Arizona (down 11%). THE STATES DEFYING MORTGAGE DELINQUENCY TRENDS As of June 2019, the 30-days or more delinquency rate was 4%, a 0.3% year-over- year decline from June 2018's rate of 4.3% according to the latest Loan Performance Insights Report from CoreLogic. Overall delinquency rates are near the lowest level since at least 1999. "A strong economy and eight-plus years of home price growth have made mortgage foreclosure an infrequent event," said Frank Nothaft, Chief Economist for CoreLogic. "is backdrop will help the mortgage market limit delinquencies in most of the country whenever a downturn should start." Despite the record low delinquency rates, several states and metropolitan areas posted small annual increases in June. e highest gains were in Vermont (+0.7%), New Hampshire (+0.3%), Nebraska (+0.2%), and Minnesota (0.2%), while the other four states, Michigan, Iowa, Wisconsin, and Connecticut, experienced a nominal gain of just 0.1%. "While the nation continues to post near- record-low mortgage delinquency rates, we are seeing signs of emerging stress in some states," said Frank Martell, President and CEO of CoreLogic. "We saw rates jump in states such as Vermont, New Hampshire, Nebraska, and Minnesota that weren't tied to a natural disaster." Additionally, the foreclosure inventory rate was 0.4% in June 2019, down 0.1% from June 2018, while serious delinquency rates declined in every state except Minnesota, Nebraska, North Dakota, and Virginia, which stayed the same. By CBSA, there were 20 metropolitan areas where the serious delinquency rate increased, and 48 metropolitan areas where the serious delinquency rate remained the same. All the remaining metropolitan areas saw the serious delinquency rate decrease. e share of mortgages that transitioned from current to 30-days past due was 1.1% in June 2019, up from 0.9% in June 2018. By comparison, in January 2007, just before the start of the financial crisis, the current-to- 30-day transition rate was 1.2% and peaked in November 2008 at 2%.

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