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

Friday, January 21, 2022

Black Knight: National Mortgage Delinquency Rate Decreased in December; Foreclosures at Record Low

by Calculated Risk on 1/21/2022 08:29:00 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: 2021 Ends With Foreclosures at All-Time Low and Near Record-Low Delinquency Rate; Serious Delinquencies Still More than 2X Pre-Pandemic Levels

At 3.38% entering January, the national delinquency rate sits just 0.1% above February 2020’s near record-low of 3.28%, just prior to the onset of the pandemic

• However, over half a million excess serious delinquencies remain – borrowers 90 or more days past due on their mortgages, including those in active forbearance – more than twice pre-pandemic levels

Just 0.24% of loans are in active foreclosure in December – an all-time low – with the month’s 4,100 foreclosure starts some 90% below December 2019 levels

• While roughly twice as many foreclosure sales (completions) occurred in the month as compared to December 2020, there were only one-third as many as in pre-pandemic December 2019

• Given the volume of borrowers who’ve exited forbearance protections in recent months, the industry must keep a very close eye on foreclosure metrics moving forward in 2022

• Prepayment activity fell by more than 7% in December and is poised to fall even further as rising rates continue to erode refinance incentive
emphasis added
According to Black Knight's First Look report, the percent of loans delinquent decreased 5.9% in December compared to November and decreased 44% year-over-year.

The percent of loans in the foreclosure process decreased 3.8% in December and were down 28% 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 3.38% in December, down from 3.59% in November.

The percent of loans in the foreclosure process decreased in December to 0.24%, from 0.25% in November.

The number of delinquent properties, but not in foreclosure, is down 1,452,000 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 Foreclosure0.24%0.25%0.33%0.46%
Number of properties:
Number of properties
that are delinquent,
but not in foreclosure:
Number of properties
in foreclosure
pre-sale inventory:
Total Properties1,927,0002,039,0003,429,0002,047,000