Black Knight released their Mortgage Monitor report for September today. According to Black Knight, 3.53% of mortgages were delinquent in September, down from 3.97% in September 2018. Black Knight also reported that 0.48% of mortgages were in the foreclosure process, down from 0.52% a year ago.
This gives a total of 4.05% delinquent or in foreclosure.
Press Release: Black Knight’s September 2019 Mortgage Monitor: First-Time Homebuyers Under Pressure as Early-Stage Delinquencies Continue to Rise Among Purchase Loans
Today, the Data & Analytics division of Black Knight, Inc. released its latest Mortgage Monitor Report, based upon the company’s industry-leading mortgage performance, housing and public records datasets. This month, Black Knight looked at the current trend of rising early-stage delinquencies, particularly among purchase loans. As Black Knight Data & Analytics President Ben Graboske explained, the number of loans that were delinquent six months following origination has been increasing over the past 24 months, with first-time homebuyers being impacted most heavily.Click on graph for larger image.
“We’ve seen early-stage delinquencies rise over the last several years, with the increase being driven primarily by purchase loans,” said Graboske. “About 1% of loans originated in Q1 2019 were delinquent six months after origination. While that’s less than one-third of the 2000-2005 average of 2.95%, it represents a more than 60% increase over the last two years and is the highest it’s been since late 2010. Early-stage GSE delinquencies currently stand at 0.6%, up two tenths of a percentage point over the past 24 months, but still 40% below the market average and 60% below their own 2000-2005 average of 1.3%. Though there has been some softening in GSE purchase loan performance, it hasn’t been to the extent seen among entry-level buyers. All in all, first-time homebuyer originations combined between the GSEs and GNMA increased by nearly 50% between 2014 and 2018. However, whereas first-time homebuyers represent just over 40% of GSE purchase loans, they make up 70% of the GNMA purchase market.
“That concentration is contributing to a more significant increase in early-stage delinquencies among GNMA loans, which saw 3.3% of loans delinquent six months after origination. That’s up 1.2 percentage points from two years ago, and though still roughly half the 2000-2005 pre-crisis average, it represents the sharpest increase we’ve seen in the market in recent years. However, performance among repeat purchasers with GNMA-securitized loans has remained relatively steady overall, with the rise more pronounced among first-time homebuyers. Rising debt-to-income ratios due to tight affordability and declining first-time homebuyer credit scores stand out as likely drivers here. With a growing population of first-time homebuyers poised to enter the market, this is a trend Black Knight will continue to monitor.”
emphasis added
Here is a graph from the Mortgage Monitor that shows the Foreclosure Sales over time.
From Black Knight:
• Foreclosure sales (completions) are down 14% year-over-year, and have now set new record lows in each of the past five quartersThe second graph shows early stage delinquencies:
• The 35.7K foreclosure sales in Q3 are nearly 50% below the pre-recession (2000-2005) average
• Florida, New York and Illinois led all states with 3.2K, 2.5K and 2.4K foreclosure completions respectively in Q3
• Despite having the largest number of foreclosure sales, Florida's sale activity declined by 19% from the year prior, while in New York, sales actually edged slightly upward year-over-year (+4% Y/Y)
• Early-stage delinquencies among recent originations continue to trend upwardThere is much more in the mortgage monitor.
• Nearly 1% of Q1 2019 originations were delinquent six months post-origination; though less than a third of 2000-2005 average of 2.93%, that’s up more than 60% over the past 24 months and the highest since 2010
• This increase has primarily been driven by a rise in early-stage delinquencies among purchase loans, and to a lesser degree by cash-out refinances
• While performance of rate/term refinances has remained relatively flat, early-stage delinquencies among cash-out refis – though lower than the market as a whole – have also moved upward in recent years
• Should the rise in delinquencies among more recent originations continue, we may ultimately see an increase in overall delinquency rates
Red lights are flashing everywhere. The US economy is on the cusp of a massive recession. The FED is way behind the curve. The repo market in disarray tells everything.
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