by Bill McBride on 5/05/2014 09:14:00 AM
Monday, May 05, 2014
Mortgage Monitor: Mortgage delinquency rate in March lowest since October 2007, "Only One in 10 American Borrowers Underwater"
Black Knight Financial Services (BKFS, formerly the LPS Data & Analytics division) released their Mortgage Monitor report for March today. According to BKFS, 5.52% of mortgages were delinquent in March, down from 5.97% in February. BKFS reports that 2.13% of mortgages were in the foreclosure process, down from 3.38% in March 2013.
This gives a total of 7.65% delinquent or in foreclosure. It breaks down as:
• 1,571,000 properties that are 30 or more days, and less than 90 days past due, but not in foreclosure.
• 1,199,000 properties that are 90 or more days delinquent, but not in foreclosure.
• 1,070,000 loans in foreclosure process.
For a total of 3,840,000 loans delinquent or in foreclosure in March. This is down from 4,997,000 in March 2013.
Click on graph for larger image.
This graph from BKFS shows percent of loans delinquent and in the foreclosure process over time.
Delinquencies and foreclosures are moving down - and might be back to normal levels in a couple of years.
The second graph from BKFS shows the percent of borrowers with negative equity. From Black Knight:
The data showed that, as home prices have risen over the past two years and many distressed loans have worked their way through the system, the percentage of Americans in negative equity positions on their mortgage has declined considerably. Meanwhile, those loans already in the foreclosure process have been aging substantially. According to Kostya Gradushy, Black Knight’s manager of Loan Data and Customer Analytics, both data trends point to a healthier housing market.There is much more in the mortgage monitor.
“Two years of relatively consecutive home price increases and a general decline in the number of distressed loans have contributed to a decreasing number of underwater borrowers,” said Gradushy. “Looking at current combined loan-to-value (CLTV), we see that while four years ago 34 percent of borrowers were in negative equity positions, today that number has dropped to just about 10 percent of active mortgage loans. While negative equity levels have declined for both judicial vs. non-judicial foreclosure states from the peak of the crisis, non-judicial states are now at just under eight percent, as compared to 13.4 percent in their judicial counterparts. Overall, nearly half of all borrowers today are both in positive equity positions and of strong credit quality – credit scores of 700 or above. Four years ago, that category of borrowers represented over a third of active mortgages.