by Calculated Risk on 12/04/2014 09:47:00 AM

Black Knight Financial Services (BKFS) released their Mortgage Monitor report for October today. According to BKFS, 5.44% of mortgages were delinquent in October, down from 5.67% in September. BKFS reported that 1.69% of mortgages were in the foreclosure process, down from 2.54% in October 2013.

This gives a total of 7.13% delinquent or in foreclosure. It breaks down as:

• 1,658,000 properties that are 30 or more days, and less than 90 days past due, but not in foreclosure.
• 1,101,000 properties that are 90 or more days delinquent, but not in foreclosure.
• 858,000 loans in foreclosure process.

For a total of ​​3,617,000 loans delinquent or in foreclosure in October. This is down from 4,427,000 in October 2013.

Click on graph for larger image.

This table from Black Knight is a comparison of 2005 to 2014 originations by Credit Score and LTV. Black Knight notes:

Borrowers with credit scores of 740 and up make up 55 percent of 2014 refinance originations, compared to just 29 percent in 2005

On the other hand, in 2005, 21 percent of refinance originations were to credit scores below 640; today that number is just 8 percent

Today’s purchase market is even more clearly separated; 56 percent of purchase originations were to credit scores of 740 and above, while just 2 percent went to borrowers with scores below 640

It is not surprising that the recent vintages of mortgage loan are the best performing ever!

This graph shows the percent of loans in negative equity grouped by CLTV.

From Black Knight:

Over the past two and a half years, there has been a sustained and continual improvement in negative equity, from 33.5 percent of borrowers being underwater in January 2012 to less than eight percent today

Only 1.2 percent of active mortgages have current CLTVs of 150 percent or higher, down from 9.5 percent in January of 2012 (the bottom of the market in terms of national home prices)

While the overall share of underwater mortgages continues to decline, delinquency rates are increasing among the remaining negative equity mortgages

For the severely underwater – 150 percent or higher current CLTVs – over three out of every four borrowers (77 percent) are delinquent

The good news is there are few borrowers with CLTV at or above 150%. The bad news is - for most of these borrowers - the only way out is foreclosure (or a short sale).

There is much more in the mortgage monitor.