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| The MarketPulse g January 2019 g Volume 8, Issue 1

The MarketPulse

JANUARY 2019

© 2019 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.ii

Table of Contents | The MarketPulse g January 2019 g Volume 8, Issue 1

Table of Contents

U.S. Economic Outlook: January 2019 Refinance Share in 2019 ...............1

‘Rate-and-Term’ Refinance Supplanted by Rise in ‘Cash-Out’

Mortgage Delinquency Rates for All Loan Types Continue to Fall............2

Loans originated in 2015 and 2016 have performed the best

California Home Sales Fall Year Over Year for Fourth Consecutive Month in November .......................................................................................3Slowdown has impacted high-end market, too, in recent months

Mega Loans: Mortgage Attributes of Wealthy Homeowners ....................5

Low interest rates and rising home values have driven refinance activity since 2013

In the News .................................................................................................................................... 6

10 Largest CBSA — Loan Performance Insights Report July 2018............................................ 8

Home Price Index State-Level Detail — Combined Single Family Including Distressed November 2018 ............................................................................................................................. 8

Home Price Index .......................................................................................................................... 9

Overview of Loan Performance .................................................................................................. 9

CoreLogic HPI® Market Condition Overview ........................................................................... 10November 2018November 2023 Forecast

Variable Descriptions .................................................................................................................. 11

Housing Statistics

January 2019

HPI® YOY Chg 5.1%

HPI YOY Chg XD 4.7%

NegEq Share (Q3 2018) 4.1%

The MarketPulseVolume 8, Issue 1January 2019Data as of November 2018 (unless otherwise stated)

News Media Contact

Alyson Austinalaustin@corelogic.com 949.214.1414 (office)

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The MarketPulse g January 2019 g Volume 8, Issue 1 | Articles

U.S. Economic Outlook: January 2019 Refinance Share in 2019‘Rate-and-Term’ Refinance Supplanted by Rise in ‘Cash-Out’

By Frank E. Nothaft

Using the CoreLogic TrueStandings data, we calculated the cumulative distribution of single-family mortgage debt outstanding by interest rate on the loan. Only 3 percent of the debt outstanding had a mortgage rate of 6 percent or higher, or only about $300 billion had a financial incentive to refinance to a lower rate. (Figure 1) Why haven’t these homeowners refinanced already? Some may have insufficient home equity, a recent delinquency, or a small loan balance: The average loan size was about $100,000 for these high-rate loans.

There do remain many homeowners who do have a financial incentive to refinance, albeit for other reasons. For instance, FHA borrowers with at least 20 percent home equity, good credit, and a mortgage rate near or slightly below today’s market rates can refinance into a conventional mortgage without mortgage insurance, eliminating their insurance premiums. Between October 2016 and September 2018, about 500,000 FHA borrowers did exactly that.1 As another example, homeowners who are financing a major home improvement may choose to refinance rather than take a costlier second mortgage. In the CoreLogic public record data we found that the cash-out share of new refinances exceeded 40 percent during the third quarter of 2018, the highest in 14 years, and we expect an even higher share this year.

Taken together, the consensus view is that the refinance share of originations will decline to about 25 percent of dollar lending this year. That will be the lowest four-quarter share in 25 years.2 (Figure 2) Nonetheless, increases in purchase lending will likely offset the decline in refinance to leave the dollar volume of originations in 2019 at about the same level as last year. ■

1 We analyzed CoreLogic public records data to identify the

number of FHA-to-conventional refinance originations during the

two-year period.2 Home Mortgage Disclosure Act data indicate that refinance

comprised 23 percent of single-family originations from mid-1994

to mid-1995. The ‘consensus view’ was formed by averaging the

origination forecasts of the Mortgage Bankers Association, Fannie

Mae and Freddie Mac.

Dr. Frank NothaftExecutive, Chief Economist, Office of the Chief Economist

Frank Nothaft holds the title executive, chief economist for CoreLogic. He leads the Office of the Chief Economist and is responsible for analysis, commentary and forecasting trends in global real estate, insurance and mortgage markets.

FIGURE 1. "IN THE MONEY" TO REFINANCE FALLS AS RATES RISECumulative Share of Active Balance by Interest Rate

0%

20%

40%

60%

80%

100%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

Interest Rate on Mortgage Debt Outstanding in September 2018

3% of Active UPB Has a Rate > 6% ~ $300 Billion

or higher

2001-04Refi Boom

2009-13Refi Boom

Tax ImplementedAugust 2016

nothaft: fig 1Peak 18.4%

Source: CoreLogic TrueStandings® Servicing

FIGURE 2. REFI SHARE PROJECTED TO FALL TO 25-YEAR LOWRefinance Share of Lending (percent, four-quarter moving average)

2001-04Refi Boom

2009-13Refi Boom

Tax ImplementedAugust 2016

nothaft: fig 2Peak 18.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

1990 1995 2000 2005 2009 2014 2019

1992-93Boom

1998Boom

2001-04Boom

2009-13Boom

23%

Forecast:2019Q4

25%

Source: Home Mortgage Disclosure Act (1990–2017); CoreLogic (2018); MBA, Fannie Mae and Freddie Mac projections (2019)

© 2019 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.2

Articles | The MarketPulse g January 2019 g Volume 8, Issue 1

Continued on page 6

Mortgage Delinquency Rates for All Loan Types Continue to FallLoans originated in 2015 and 2016 have performed the best

By Archana Pradhan

1 Serious delinquency is defined as 90 days or more past due or in

foreclosure proceedings.2 Based on CoreLogic public record data.3 Texas, Florida and Puerto Rico were excluded in the comparison

of the national delinquency rate for yearly vintages to avoid the

effects of the 2017 natural hazards.4 The National Bureau of Economic Research has identified

the January 2008 through June 2009 period as an economic

recession, and recovery began July 2009; see http://www.nber.

org/cycles.html.

Continued on page 7

Archana PradhanEconomist

Archana Pradhan is an economist for CoreLogic in the Office of the Chief Economist and is responsible for analyzing housing and mortgage markets trends.

FIGURE 1. SERIOUS DELINQUENCY RATE BY LOAN TYPES

1.1%

1.9%

3.7%

0%

2%

4%

6%

8%

10%

Sep-07 Jul-09 May-11 Mar-13 Jan-15 Nov-16 Sep-18

pradhan: fig 1

Source: CoreLogic, September 2018

FIGURE 2. SERIOUS DELINQUENCY SHARE BY LOAN VINTAGE

0%

20%

40%

60%

80%

100%

Jan09 Jun11 Nov13 Apr16 Sep18

FHA Loans

Pre 2003 2003-2009 2010-2018

0%

20%

40%

60%

80%

100%

Jan09 Jun11 Nov13 Apr16 Sep18

VA Loans

Pre 2003 2003-2009 2010-2018

0%

20%

40%

60%

80%

100%

Jan09 Jun11 Nov13 Apr16 Sep18

Conventional Loans

Pre 2003 2003-2009 2010-2018

pradhan: fig 2

Source: CoreLogic, September 2018

The CoreLogic Loan Performance Insights Report analyzes mortgage performance for all home loans. Based on this report, the serious delinquency rate for September 2018 was 1.5 percent, representing a 0.4 percentage point decline compared with September 2017.1 Declining unemployment rates and rising home prices have helped to reduce this delinquency rate. This blog explores trends in the default experience over time by loan type and examines how product mix or loan vintage contributes to the national delinquency rate.

As of September 2018, the serious delinquency rates for Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), and conventional loans

were 3.7, 1.9 and 1.1 percent, respectively (Figure 1). The serious delinquency rate dropped significantly for all loan types in September 2018 compared with September 2017. These rates represent an 11-year low.

CoreLogic data shows the serious delinquency rate for FHA loans is more than three times higher than the serious delinquency rate for conventional loans. Part of this trend could be the rise in FHA to conventional refinancing since 2013. This refinancing has transferred a large number of current FHA loans into the conventional servicing book and left higher-risk FHA loans outstanding. FHA to conventional refinances accounted for about 10 percent of all refinances in 2017 compared to 2 percent in 2012.2 In 2016 and 2017, about 550,000 borrowers refinanced from an FHA loan to a conventional loan. By FHA to conventional refinancing, borrowers with good credit history and at least 20 percent home equity can eliminate their mortgage insurance premium.

A closer look reveals that today’s delinquency rates are influenced by older loans. The bulk of conventional loans that were seriously delinquent were originated between 2003 and 2009 (Figure 2). About 67 percent

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The MarketPulse g January 2019 g Volume 8, Issue 1 | Articles

Continued on page 4

California Home Sales Fall Year Over Year for Fourth Consecutive Month in November Slowdown has impacted high-end market, too, in recent months

By Andrew LePage

FIGURE 1. CALIFORNIA TOTAL NOVEMBER HOME SALES FOR EACH YEAR

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

lepage: fig 1

Mean: 1.6%Standard deviation: 5.7%Low appraisals: 9.8%

Leng

th o

f Sta

y

Source: CoreLogic public records

FIGURE 2. CALIFORNIA MONTHLY MEDIAN SALE PRICE

May-07: $486,500

Nov-18: $490,000

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

lepage: fig 2

Mean: 1.6%Standard deviation: 5.7%Low appraisals: 9.8%

Leng

th o

f Sta

y

Source: CoreLogic public records

Andrew LePageResearch Analyst

Andrew LePage joined CoreLogic in 2015 as a research analyst working in the Office of the Chief Economist. Previously, Andrew was an analyst and writer for DQNews, a partner of DataQuick (acquired by CoreLogic in 2014). Andrew provided real estate data and trend analysis to journalists and issued a variety of housing market reports to the news media on behalf of DataQuick. Prior to that he was a staff writer at the Sacramento Bee newspaper covering residential real estate topics in the capital region and across California. He continues to monitor California’s housing market for CoreLogic in two monthly data briefs detailing trends in Southern California and the San Francisco Bay Area.

Golden State home sales fell on a year-over-year basis for the fourth consecutive month in November, with declines across the price spectrum—including $1 million-plus deals—and all major regions of the state. With inventory higher and some potential buyers priced out or simply unwilling to buy, the annual growth rate for the state’s median sale price in November was less than half the year-earlier level.

An estimated1 33,654 new and existing houses and condos sold statewide in November 2018 (Figure 1), down 12.2 percent from October 2018 and down 12.1 percent from November 2017, CoreLogic public records data show. Sales typically fall between October and November and since 2000 the average change between those two months is a decline of 9.4 percent. Sales have fallen year over year in six out of the last seven months, including annual declines of 9.2 percent last June, 7.0 percent in August, 17.2 percent in September and 6.2 percent in October.

November sales below $500,000 fell 16.9 percent year over year, while sales of $500,000 or more declined 8.4 percent and $1 million-plus deals fell 9.6 percent compared with November 2017. Sales of $1 million or more during the September-through-

November period fell 3.8 percent from the same period in 2017, while multi-million-dollar sales fell 4.5 percent over the same period.

The sales slowdown, which began during the heart of the 2018 Spring-Summer homebuying season, reflects then-rising mortgage rates that worsened affordability, as well as a shift in buyer psychology that left some would-be buyers waiting to see if the market was nearing a peak, after which buying conditions might improve. In recent months, stock market volatility could have contributed to the high-end pullback. Market corrections can spook high-end buyers and leave

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Articles | The MarketPulse g January 2019 g Volume 8, Issue 1

1 Because of late data availability, November 2018 sales were not

complete in some counties.

“With inventory higher and some potential buyers priced out or simply unwilling to buy, the annual growth rate for the state’s median sale price in November was less than half the year-earlier level.”

FIGURE 3. YEAR-OVER-YEAR CHANGE IN CALIFORNIA'S MEDIAN SALE PRICE

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2001 2003 2005 2007 2009 2011 2013 2015 2017

lepage: fig 3

Mean: 1.6%Standard deviation: 5.7%Low appraisals: 9.8%

Leng

th o

f Sta

y

Source: CoreLogic public records

California Home Sales continued from page 3

some with inadequate funds to cover down payment and closings costs.

The median price paid for all new and existing houses and condos sold statewide in November 2018 was $490,000 (Figure 2), up 1.0 percent from October and up 4.3 percent from November 2017. The November median’s 4.3 percent annual gain was the second lowest for 2018, behind a 4.1 percent increase in September. In November 2017 the median’s annual gain was 9.3 percent.

In nominal terms California’s median sale price hit an all-time high of $500,000 in June 2018. Adjusted for inflation, however, the median has not returned to its pre-housing-bust peak in March 2007, and the November 2018 median was 15.1 percent below that peak.

The 4.3 percent annual gain in the November 2018 median sale price (Figure 3) understates the affordability challenge many would-be buyers face. Compared with November 2017, the monthly principal-and-interest mortgage

payment on the state’s median-priced home in November 2018 was up 16.6 percent because of a nearly one percentage-point gain in mortgage rates over the prior year.

Other November 2018 highlights: ► In the six-county Southern California region, 17,170 new and existing houses and condos sold in November, down 12.3 percent year over year. November’s median sale price was $522,750, up 3.5 percent year over year.

► In the nine-county San Francisco Bay Area, 6,147 new and existing houses and condos sold in November 2018, down 15.2 percent year over year. November’s median sale price was $815,000, up 3.8 percent year over year.

► Some of the state’s more affordable counties logged relatively small annual declines in total home sales in November 2018. Some examples: Sacramento (−8.9 percent), Solano (−7.7 percent), Riverside (−6.4 percent), Tulare (−3.0 percent), and Kern (−0.8 percent). However, examples of relatively affordable counties where sales fell more sharply year over year in November include San Joaquin (−11.0 percent), Stanislaus (−13.5 percent) and San Bernardino (−13.6 percent). ■

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The MarketPulse g January 2019 g Volume 8, Issue 1 | Articles

Continued on page 7

Mega Loans: Mortgage Attributes of Wealthy HomeownersLow interest rates and rising home values have driven refinance activity since 2013

By Arthur Jobe

FIGURE 1. MEGA LOANS OUTSTANDING BY ORIGINATION YEAR, LOAN PURPOSE AND RATE TYPE SINCE 2010Over One-half were Refinances made between 2015–2018

0

5

10

15

20

25

30

35

40

45

Refin

anc

e

Refin

anc

e

Purc

hase

Refin

anc

e

Purc

hase

Refin

anc

e

Purc

hase

Refin

anc

e

Refin

anc

e

Purc

hase

Refin

anc

e

Purc

hase

Refin

anc

e

Purc

hase

Refin

anc

e

Purc

hase

2010 2011 2012 2013 2014 2015 2016 2017 2018

Adjustable-Rate Fixed-rate

jobe: fig 1

Source: CoreLogic, August 2018

1 Where prior mortgage data were available.

CoreLogic public records data show a cluster of active-mortgage loans that have origination amounts between $10 million and $20 million in recent years. We identified over 230 total active “super” jumbo mortgages and observed that 75 percent were originated since 2013. Refinances account for roughly 180 of the total count, and 74 percent of these were also originated since 2013. A more in-depth analysis of the refinance share highlights the likely motivations of these wealthy homeowners.

The data shows that some borrowers were able to take advantage of lower interest rates through these refinances. Adjustable-rate mortgages (ARMs) have been particularly popular with loans of this magnitude due to their lower initial interest rates. While the expiration of the fixed-rate term on the preceding ARM may have provided the incentive to refinance, the data reveals that borrowers were able to capitalize on lower interest rates before the first adjustment. In fact, half of borrowers refinancing ARM loans before the first adjustment were able to obtain lower interest rates, decreasing their interest rate by an average of 70 basis points.1

ARMs remained the most popular option for those financing luxury homes. Roughly 76 percent of borrowers refinancing ARM loans opted to go with another ARM, and 31 percent of the fixed-rate borrowers switched to an ARM. The median initial interest rate for those ARMs was 3.25 percent, and most borrowers will see the adjustable period begin by the third quarter of 2024.

The share of cash-out refinances, particularly among fixed-rate borrowers, suggests the desire of homeowners to access cash by borrowing against home equity. Of the currently active loans originated in 2013 or later, 47 percent have been identified as cash-out refinances. By comparison, the two next largest mortgage purposes, consolidation and rate/term reduction loans, account for 21 percent and 16 percent, respectively. Often, the refinance mortgage origination amounts exceed the preceding

Arthur JobeSenior Professional, Economist, Office of the Chief Economist

Arthur Jobe holds the title of senior professional economist for CoreLogic in the Office of the Chief Economist. He is responsible for analyzing mortgage and real estate trends. He began his tenure at CoreLogic with the Advisory Services team, working directly with clients and utilizing various CoreLogic data assets to design and deliver customized solutions. He also supported the CoreLogic Lien & Equity Analytics Radar (CLEAR) product as a developer.

Arthur has more than 13 years of experience in accounting for the mortgage industry. He previously worked as an information analyst with Chase Home Mortgage and supported business leaders by providing research, analysis and report development. He also worked as a senior accountant for Retalix and ADT where he focused on management reporting.

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Articles | The MarketPulse g January 2019 g Volume 8, Issue 1

Mortgage Delinquency continued from page 2

FIGURE 3. SERIOUS DELINQUENCY RATE BY LOAN TYPES AND LOAN VINTAGE

pradhan: fig 3

0%

2%

4%

6%

8%

10%

3 4 5 6 7 8 9 10 11 12 13 14 15

Months since mortgage origination

Loans Originated in 2007

0.0%

0.5%

1.0%

1.5%

2.0%

3 4 5 6 7 8 9 10 11 12 13 14 15

Months since mortgage origination

Loans Originated in 2017

Source: CoreLogic, September 2018

In the News

Forbes – Jan 9

Foreclosures And Underwater Mortgages

Fall To Lowest Rate In Years

According to new data from CoreLogic, October saw

the country’s lowest overall delinquency rate — the

share of total mortgage borrowers behind on their

mortgage — since 2001.

Scotsman Guide – Jan 9

Economist: Foreclosures could hit bottom

in 2019

Foreclosures have been declining for yea rs, and

mortgage delinquencies hit an 18-year low this past

October, but CoreLogic Chief Economist Frank Nothaft

says 2019 likely won’t be the year when mortgage

performance takes a turn for the worse.

Las Vegas Review Journal – Jan 8

Las Vegas’ housing market ended 2018

with a drop in sales

Amid a stronger economy and a growing population,

Las Vegas home prices have climbed fastest among

major U.S. markets for five consecutive months,

according to the S&P CoreLogic Case-Shiller index,

whose latest report covered October.

Fox Business – Jan 5

Mortgage rates give house hunters

window of opportunity

U.S. home prices rose 5.1 percent in November,

compared with the same period last year, according

to CoreLogic. Experts expect they will rise another

4.8 percent throughout the coming year.

National Association of Realtors – Jan 3

Report: Here Comes a Buyer’s Market

Buyers are having more choice, prompting some

sellers to lower their asking prices due to the added

competition, according to CoreLogic researchers.

of the conventional loans that were seriously delinquent in September 2018 were originated between 2003 and 2009 compared to just 23 percent of seriously delinquent conventional loans originated between 2010 and 2018. However, the delinquency rates for government loans were influenced by comparatively more recent loans. About 48 percent of the FHA loans and 69 percent of VA loans that were seriously delinquent were originated between 2010 and 2018.

Figure 3 compares the serious delinquency pattern by origination year, including a breakout of conventional affordable housing loans.3 Each line in the figure represents the serious delinquency rate for loans originated in a given year as a function of the number of months since the loan was originated. Analyzing these vintages shows three important trends.

First, delinquency rates were much higher for all loan types originated between 2006 and 2008. Performance of all types of loans started to improve gradually beginning with the 2009 vintage as the underwriting standards tightened and the economic recovery began mid-2009.4

Second, the delinquency rate for government loans was higher than conventional loans.

Third, in general, loans originated in 2015 and 2016 have performed the best, with the lowest 15-month delinquency rate in a decade. The delinquency rate for affordable housing loans originated prior to 2009 were similar to the rates for FHA and VA loans. However, the affordable loans originated in the past three years have a significantly lower delinquency rate than the FHA and VA loans. In fact, the serious delinquency rate for affordable housing loans is only a little bit higher than that of conventional loans. ■

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The MarketPulse g January 2019 g Volume 8, Issue 1 | Articles

“…public records data show a cluster of active-mortgage loans that have origination amounts between $10 million and $20 million in recent years.”

Mega Loans continued from page 5

FIGURE 2. CASH-OUT REFINANCE GAIN POPULARITY IN 2018Mortgage Purpose Type Share of Mega-Loan Refinances

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018

Cash Out First Consolidation Rate/Term Reduction Other

jobe: fig 1

Source: CoreLogic, August 2018

FIGURE 3. DISTRIBUTION OF CASH-OUT REFINANCE MEGA LOANS BY STATE

State Cash-Out Refi Share

California 55%

Florida 17%

Massachusetts 6%

Connecticut 6%

New York 4%

Texas 4%

All Other States 8%

Source: CoreLogic, August 2018

loan origination amounts by several million dollars.1 The average increase in original principal balance for loans identified as cash-out refinance was $6.6 million. In 2018, the average refinance origination amount exceeded the prior mortgage amount by $8.3 million. Over half of fixed-rate borrowers received financing from three large banks, and public data shows that a 15-year term

was the most popular with fixed-rate loans, followed closely by 30-year. The distribution of cash-out refinance mega loans outstanding by state shows that most properties were located in California. Further, the six states with the largest number of these loans account for 92 percent of all cash-out refinance mega loans. ■

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Analysis | The MarketPulse g January 2019 g Volume 8, Issue 1

“The rise in mortgage rates has dampened buyer demand and slowed home-price growth. Interest rates for new 30-year fixed-rate loans averaged 4.9 percent during December, the highest monthly average since February 2011. These higher rates and home prices have reduced buyer affordability. Home sellers are responding by lowering their asking price, which is reflected in the slowing growth of the CoreLogic Home Price Index.”

Dr. Frank Nothaft,

chief economist for CoreLogic

Home Price Index State-Level Detail — Combined Single Family Including Distressed November 2018

StateMonth-Over-Month

Percent ChangeYear-Over-Year Percent Change

Forecasted Month-Over-Month

Percent Change

Forecasted Year-Over-Year Percent Change

Alabama 0.0% 4.7% 0.2% 5.6%Alaska −0.4% 1.8% 0.1% 6.0%

Arizona 0.3% 7.6% 0.2% 6.1%Arkansas 0.0% 2.9% 0.2% 4.9%

California −0.3% 5.0% −0.1% 8.6%Colorado 0.2% 6.8% 0.1% 4.2%

Connecticut −0.2% 1.5% 0.1% 7.5%Delaware −0.7% 0.1% 0.0% 4.6%

District of Columbia −0.6% 1.8% 0.1% 4.3%Florida 0.4% 5.5% 0.3% 7.4%

Georgia 0.1% 6.8% 0.2% 5.3%Hawaii 0.8% 5.4% 0.3% 6.5%Idaho 0.2% 11.0% 0.1% 3.6%Illinois −0.5% 2.9% 0.2% 6.5%

Indiana 0.6% 6.7% 0.3% 6.0%Iowa 0.4% 3.6% 0.2% 5.8%

Kansas 0.5% 5.6% 0.3% 5.4%Kentucky 0.1% 4.4% 0.2% 4.9%Louisiana 0.2% 0.0% 0.0% 2.9%

Maine −1.2% 3.6% −0.4% 5.5%Maryland −0.1% 2.4% 0.1% 4.8%

Massachusetts −0.1% 5.0% 0.0% 6.2%Michigan 0.2% 6.9% 0.2% 7.1%

Minnesota −0.1% 5.7% 0.2% 5.1%Mississippi 1.9% 2.8% 0.2% 4.7%

Missouri 0.7% 6.1% 0.2% 5.9%Montana 1.0% 5.2% 0.4% 3.8%Nebraska −0.1% 5.4% 0.1% 4.9%

Nevada 0.0% 11.1% 0.0% 8.8%New Hampshire 0.4% 6.0% 0.3% 7.1%

New Jersey 0.1% 3.3% 0.3% 6.5%New Mexico 1.2% 5.1% 0.4% 4.6%

New York 1.4% 5.6% 0.3% 6.2%North Carolina 0.1% 4.9% 0.2% 5.3%North Dakota −0.4% −2.3% 0.2% 4.4%

Ohio 0.5% 6.0% 0.2% 5.3%Oklahoma −0.1% 2.5% 0.1% 4.3%

Oregon −0.3% 5.5% 0.1% 7.4%Pennsylvania −0.5% 3.7% 0.1% 5.7%Rhode Island 0.7% 6.5% 0.2% 5.5%

South Carolina −0.2% 4.4% 0.1% 5.5%South Dakota 0.4% 0.6% 0.1% 4.9%

Tennessee 0.7% 6.2% 0.2% 4.5%Texas −0.4% 4.3% 0.0% 2.6%Utah 0.3% 8.8% 0.1% 4.7%

Vermont −0.8% 2.2% 0.3% 4.9%Virginia −0.3% 2.7% 0.1% 5.2%

Washington −0.4% 7.2% −0.1% 5.5%West Virginia −0.5% 7.2% 0.1% 5.6%

Wisconsin −0.3% 5.5% 0.1% 5.3%Wyoming 0.1% 3.8% −0.2% 2.9%

Source: CoreLogic November 2018

10 Largest CBSA — Loan Performance Insights Report October 2018

CBSA

30 Days or More Delinquency Rate October 2018 (%)

Serious Delinquency Rate October 2018 (%)

Foreclosure Rate October 2018 (%)

30 Days or More Delinquent Rate

October 2017 (%)

Serious Delinquency Rate October 2017 (%)

Foreclosure Rate October 2017 (%)

Boston-Cambridge-Newton MA-NH 3.2 1.1 0.3 3.6 1.4 0.5

Chicago-Naperville-Elgin IL-IN-WI 4.4 1.8 0.6 5.0 2.3 0.8

Denver-Aurora-Lakewood CO 1.7 0.4 0.1 1.9 0.5 0.1

Houston-The Woodlands-Sugar Land TX 5.3 2.0 0.3 11.0 2.6 0.2

Las Vegas-Henderson-Paradise NV 3.7 1.7 0.6 4.5 2.3 0.9

Los Angeles-Long Beach-Anaheim CA 2.5 0.7 0.2 2.8 0.9 0.2

Miami-Fort Lauderdale-West Palm Beach FL 5.6 2.7 0.9 12.5 3.3 0.8

New York-Newark-Jersey City NY-NJ-PA 5.6 2.9 1.4 6.7 3.8 1.9

San Francisco-Oakland-Hayward CA 1.4 0.4 0.1 1.7 0.6 0.1

Washington-Arlington-Alexandria DC-VA-MD-WV 3.5 1.3 0.3 4.1 1.6 0.5

Source: CoreLogic October 2018

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The MarketPulse g January 2019 g Volume 8, Issue 1 | Analysis

OVERVIEW OF LOAN PERFORMANCENational Delinquency Rates

Source: CoreLogic October 2018

4.1

1.9

0.7 0.3

1.0 1.2

0.5

5.1

2.3

0.9

0.4

1.3 1.5

0.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

30+ days 30 to 59 days 60 to 89 days 90 to 119 days 90+ days (not infcl)

120+ days In Foreclosure

Perc

enta

ge R

ate

October 2017

October 2018

2.61x5.11 / 2.69x4.98loan performance oct 2018: national overview

90-119 DaysPast Due

120+ DaysPast Due

60-89 DaysPast Due

30-59 DaysPast Due

30 Days or MorePast Due

90+ Days(not in fcl)

HOME PRICE INDEXPercentage Change Year Over Year

Source: CoreLogic November 2018

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Including Distressed

2.58x4.99hpi as of nov 2018

Charts & Graphs

“Despite some regional spikes related to hurricane and fire impacted areas, overall delinquency rates are near or at historic lows.”

Frank Martell,

president and CEO of CoreLogic

© 2019 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.10

Analysis | The MarketPulse g January 2019 g Volume 8, Issue 1

Legend

Normal

Overvalued

Undervalued

CORELOGIC HPI® MARKET CONDITION OVERVIEWNovember 2018

Source: CoreLogic CoreLogic HPI Single Family Combined Tier, data through November 2018. CoreLogic HPI Forecasts Single Family Combined Tier, starting in December 2018.

Legend

Normal

Overvalued

Undervalued

CORELOGIC HPI® MARKET CONDITION OVERVIEWNovember 2023 Forecast

Source: CoreLogic CoreLogic HPI Single Family Combined Tier, data through November 2018. CoreLogic HPI Forecasts Single Family Combined Tier, starting in December 2018.

© 2019 CoreLogic — Proprietary. This material may not be reproduced in any form without express written permission.11

Analysis | The MarketPulse g January 2019 g Volume 8, Issue 1

Variable Descriptions

Variable Definition

Total Sales The total number of all home-sale transactions during the month.

Total Sales 12-Month sum The total number of all home-sale transactions for the last 12 months.

Total Sales YoY Change 12-Month sum

Percentage increase or decrease in current 12 months of total sales over the prior 12 months of total sales

New Home Sales The total number of newly constructed residentail housing units sold during the month.

New Home Sales Median Price The median price for newly constructed residential housing units during the month.

Existing Home Sales The number of previously constucted homes that were sold to an unaffiliated third party. DOES NOT INCLUDE REO AND SHORT SALES.

REO Sales Number of bank owned properties that were sold to an unaffiliated third party.

REO Sales Share The number of REO Sales in a given month divided by total sales.

REO Price Discount The average price of a REO divided by the average price of an existing-home sale.

REO Pct The count of loans in REO as a percentage of the overall count of loans for the reporting period.

Short Sales The number of short sales. A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan.

Short Sales Share The number of Short Sales in a given month divided by total sales.

Short Sale Price Discount The average price of a Short Sale divided by the average price of an existing-home sale.

Short Sale Pct The count of loans in Short Sale as a percentage of the overall count of loans for the month.

Distressed Sales Share The percentage of the total sales that were a distressed sale (REO or short sale).

Distressed Sales Share (sales 12-Month sum)

The sum of the REO Sales 12-month sum and the Short Sales 12-month sum divided by the total sales 12-month sum.

HPI MoM Percent increase or decrease in HPI single family combined series over a month ago.

HPI YoY Percent increase or decrease in HPI single family combined series over a year ago.

HPI MoM Excluding Distressed

Percent increase or decrease in HPI single family combined excluding distressed series over a month ago.

HPI YoY Excluding Distressed Percent increase or decrease in HPI single family combined excluding distressed series over a year ago.

HPI Percent Change from Peak

Percent increase or decrease in HPI single family combined series from the respective peak value in the index.

90 Days + DQ Pct The percentage of the overall loan count that are 90 or more days delinquent as of the reporting period. This percentage includes loans that are in foreclosure or REO.

Stock of 90+ Delinquencies YoY Chg Percent change year-over-year of the number of 90+ day delinquencies in the current month.

Foreclosure Pct The percentage of the overall loan count that is currently in foreclosure as of the reporting period.

Percent Change Stock of Foreclosures from Peak

Percent increase or decrease in the number of foreclosures from the respective peak number of foreclosures.

Pre-foreclosure Filings The number of mortgages where the lender has initiated foreclosure proceedings and it has been made known through public notice (NOD).

Completed ForeclosuresA completed foreclosure occurs when a property is auctioned and results in either the purchase of the home at auction or the property is taken by the lender as part of their Real Estate Owned (REO) inventory.

Negative Equity Share The percentage of mortgages in negative equity. The denominator for the negative equity percent is based on the number of mortgages from the public record.

Negative Equity

The number of mortgages in negative equity. Negative equity is calculated as the difference between the current value of the property and the origination value of the mortgage. If the mortgage debt is greater than the current value, the property is considered to be in a negative equity position. We estimate current UPB value, not origination value.

Months' Supply of Distressed Homes (total sales 12-Month avg)

The months it would take to sell off all homes currently in distress of 90 days delinquency or greater based on the current sales pace.

Price/Income Ratio CoreLogic HPI™ divided by Nominal Personal Income provided by the Bureau of Economic Analysis and indexed to January 1976.

Conforming Prime Serious Delinquency Rate

The rate serious delinquency mortgages which are within the legislated purchase limits of Fannie Mae and Freddie Mac. The conforming limits are legislated by the Federal Housing Finance Agency (FHFA).

Jumbo Prime Serious Delinquency Rate

The rate serious delinquency mortgages which are larger than the legislated purchase limits of Fannie Mae and Freddie Mac. The conforming limits are legislated by the Federal Housing Finance Agency (FHFA).

corelogic.com

End Notes | The MarketPulse g January 2019 g Volume 8, Issue 1

© 2019 CoreLogic, Inc. All rights reserved.

CORELOGIC, the CoreLogic logo, CORELOGIC HPI and TRUESTANDINGS are trademarks of CoreLogic, Inc. and/or its subsidiaries. All other trademarks are the property of their respective holders.

17-MKTPLSE-0119-00

Source: CoreLogicThe data provided is for use only by the primary recipient or the primary recipient's publication or broadcast. This data may not be re-sold, republished or licensed to any other source, including publications and sources owned by the primary recipient's parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data is illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website. For questions, analysis or interpretation of the data, contact CoreLogic at newsmedia@corelogic.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. This data is compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources.

For more information please call 866.774.3282

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