Monday, April 04, 2016

Black Knight February Mortgage Monitor

by Bill McBride on 4/04/2016 08:01:00 AM

Black Knight Financial Services (BKFS) released their Mortgage Monitor report for February today. According to BKFS, 4.45% of mortgages were delinquent in February, down from 5.09% in February, and the lowest since April 2007. BKFS also reported that 1.30% of mortgages were in the foreclosure process, down from 1.72% a year ago.

This gives a total of 5.75% delinquent or in foreclosure.

Press Release: Black Knight’s February Mortgage Monitor: Negative Equity Rates Improve, But Lowest-Priced Homes Continue to Struggle; “Serial Refinancers” Played Large Role in 2015 Refi Wave

Today, the Data & Analytics division of Black Knight Financial Services, Inc. released its latest Mortgage Monitor Report, based on data as of the end of February 2016. This month, in light of its recent reports on rising equity levels nationwide, Black Knight looked at those on the other end of the spectrum and found that as of the end of 2015, there were still 3.2 million borrowers in negative equity positions, representing $126 billion in underwater first and second lien housing debt. While negative equity rates continue to improve on the national level, the recovery is decidedly imbalanced in terms of both home price levels and geography. As Black Knight Data & Analytics Senior Vice President Ben Graboske explained, borrowers whose homes are in the lowest tier of home prices continue to struggle with high negative equity rates.

“Throughout 2015, the negative equity population in the U.S. decreased by over 30 percent, bringing another 1.5 million homeowners out from underwater on their mortgages,” said Graboske. “However, even after four years of improvement, the recovery has not reached all corners. When we looked at the population by home price levels, we found that over half of the nation’s underwater properties are in the lowest 20 percent of their respective markets. That’s the highest share on record. In fact, while the national negative equity rate is now 6.5 percent, for homes in the lowest price tier, it’s over 16 percent. Furthermore, this group is seeing a slower recovery than the nation as a whole. At the current rate of improvement, it would take more than five years for the negative equity rate in this lowest price tier to reach 2005 levels – roughly two-and-a-half years longer than homes in the top 20 percent.”
emphasis added
BKFS Click on graph for larger image.

This graph from Black Knight shows the mortgage performance.

From Black Knight:
The national delinquency rate is now 4.45 percent, the lowest it’s been since April 2007

February’s nearly 13 percent decline in mortgage delinquencies was largest one-month drop in 10 years; FHA loans led the way, seeing a 17 percent decline

Loans curing from a more delinquent status were up 67 percent from January, marking the highest one month volume of cures in 3 years at 645,000

With a 59,000 drop in inventory, the 90+ delinquency rate fell by 7 percent month-over month and is now below 750,000 for the first time since 2007
BKFSAnd on negative equity from Black Knight:
The inventory of loans in negative equity positions dropped by 31 percent (1.5 million) in 2015

At a total of 3.2 million, or 6.5 percent of all homeowners with a mortgage, this represents significant improvement from the peak in 2010, but is still well above “normal” levels

In Nevada, where home prices are still 34 percent below their peak, over 14 percent of borrowers are underwater on their mortgages, the largest share in the nation
There is much more in the mortgage monitor.