In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Monday, April 07, 2014

Mortgage Monitor: Delinquencies are below 6% for the first time since 2008, "Little Sign of Easing" in Credit Standards

by Calculated Risk on 4/07/2014 08:29:00 AM

Black Knight Financial Services (BKFS, formerly the LPS Data & Analytics division) released their Mortgage Monitor report for February today. According to LPS, 5.97% of mortgages were delinquent in February, down from 6.27% in January. BKFS reports that 2.22% of mortgages were in the foreclosure process, down from 3.38% in February 2013.

This gives a total of 8.17% delinquent or in foreclosure. It breaks down as:

• 1,749,000 properties that are 30 or more days, and less than 90 days past due, but not in foreclosure.
• 1,242,000 properties that are 90 or more days delinquent, but not in foreclosure.
• 1,115,000 loans in foreclosure process.

For a total of ​​4,106,000 loans delinquent or in foreclosure in February. This is down from 5,104,000 in February 2013.

Delinquency Rate 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.  BKFS reports: "Delinquencies are below 6% for the first time since ‘08; foreclosures down 34% in the last year"

Delinquency RateThe second graph from BKFS shows the credit score distribution for all mortgage originations. From Herb Blecher, senior vice president of Black Knight’s Data and Analytics division:

Credit standards have shown little sign of easing -- only about 30 percent of 2013 loans went to borrowers with credit scores below 720 -- which indicates that significant opportunity to expand mortgage origination activity is available, if risk appetites allow."
emphasis added
There is much more in the mortgage monitor.