The researchers at The Urban Institute have a new report worth a look.

It’s a critical read if you’re going to understand mortgage default rates.

Here’s just a taste of what they say. 

1.     Which definition of default are you using?

Each mortgage loan has specific payment terms, usually a requirement that a certain amount be paid on a certain date each month. Borrowers are also usually granted a grace period (15 days is common) before a lender starts charging interest on a late payment. A loan is delinquent if a payment is between 30 and 90 days late (as measured from the original payment date). Once a payment is later than that, the concept of default begins, and confusion sets in.

2.      Which group of loans are you analyzing?

Regardless of which definition one uses for a default, it’s also important to understand which group of loans is being evaluated. Sometimes we look at a group of loans originated in a common year, referred to as a “loan vintage.” Vintage default charts relate to static pools of loans: once a loan is part of a vintage, it remains part of that vintage, and no new loans enter it once the year is over.

Read the full report here.