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Friday, August 20, 2021

Black Knight: National Mortgage Delinquency Rate Decreased in July

by Calculated Risk on 8/20/2021 08:26:00 AM

Note: At the beginning of the pandemic, the delinquency rate increased sharply (see table below).   Loans in forbearance are counted as delinquent in this survey, but those loans are not reported as delinquent to the credit bureaus.

From Black Knight: Black Knight: Overall Mortgage Delinquencies Edge Closer to Pre-Pandemic Levels, But 1.45M Remain Seriously Past Due as Foreclosure Moratorium Expired at End of July

The national delinquency rate saw a 5% reduction in July and at 4.14% is now down by nearly half since May of last year

• Delinquencies have now improved in 12 of the last 14 months, with the two monthly increases being calendar-related as opposed to being indicative of worsening performance

• While overall delinquency volumes continue to edge closer to pre-pandemic levels, the number of serious delinquencies were still significantly elevated as federal foreclosure moratoria expired at the end of July

• Some 1.45 million borrowers remained 90 or more days past due – but not yet in foreclosure – entering August, more than 1 million more than at the onset of the pandemic

• Foreclosure starts remained muted in July, the final month of the foreclosure moratorium on federally backed mortgages, down 58% from the same time last year

While the number of loans in active foreclosure fell by 5,000 to yet another record low, potential foreclosure activity in the coming months warrants close observation

• After rising in June, prepayment activity slid by 11% in July; however, low 30-year rates in recent weeks have resulted in a modest resurgence in refinance incentive which may impact August prepay numbers
emphasis added
According to Black Knight's First Look report, the percent of loans delinquent decreased 5.2% in July compared to June, and decreased 40% year-over-year.

The percent of loans in the foreclosure process decreased 4.0% in July and were down 26% over the last year.

Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 4.14% in July, down from 4.37% in June.

The percent of loans in the foreclosure process decreased in July to 0.26%, from 0.27% in June.

The number of delinquent properties, but not in foreclosure, is down 1,486,000 properties year-over-year, and the number of properties in the foreclosure process is down 50,000 properties year-over-year.

Black Knight: Percent Loans Delinquent and in Foreclosure Process
In Foreclosure0.26%0.27%0.36%0.49%
Number of properties:
Number of properties
that are delinquent,
but not in foreclosure:
Number of properties
in foreclosure
pre-sale inventory:
Total Properties2,346,0002,466,0003,881,0002,065,000