Black Knight: Seriously Delinquent Loans at 12-Year Low

Mike Sorohan msorohan@mba.org

November 27, 2018

Black Knight, Jacksonville, Fla., said seriously past-due loans fell to pre-recession levels as October mortgage delinquencies fell by nearly 18 percent from a year ago, while foreclosure starts saw an uptick.

The company's First Look Mortgage Monitor report said after rising sharply in September, mortgage delinquencies fell by 8.2 percent in October and are now down by nearly 18 percent from a year ago. The report said serious delinquencies (loans 90 or more days past due) fell by 14,000 from last month and 90,000 from a year ago to less than 500,000, a level not seen since 2006.

The report did report foreclosure starts increased in October from September's nearly 18-year low, but noted the number of loans in active foreclosure fell slightly from September and fell by by 24 percent from last year.

The report also noted improvements in hurricane-related delinquencies associated with 2017 storms Harvey and Irma contributed to year-over-year improvements.

Earlier this month, the Mortgage Bankers Association reported mortgage delinquency rates rose slightly in the third quarter as summer national disasters impacted results in some states. The MBA 3Q National Delinquency Survey reported the delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 4.47 percent of all loans outstanding, up 11 basis points from the previous quarter, but down 41 basis points from one year ago. The percentage of loans on which foreclosure actions were started dropped one basis point from the second quarter to 0.23 percent, its lowest level since fourth quarter 1985.

Other Black Knight report highlights:

--Prepayment activity--now driven primarily by housing turnover--climbed 14 percent, but remains 29 percent below last year's level.

--Total U.S. foreclosure pre-sale inventory fell to 0.52 percent, down by 0.54 percent from September and down by 24.24 percent from a year ago.

--Foreclosure starts totaled 50,600 in October, up by 26.5 percent from September and up by 0.80 percent from a year ago.

--Properties 30 or more days past due but not in foreclosure: 1.884 million, down by 165,000 from September and down by 378,000 from a year ago.

--Properties 90 or more days past due but not in foreclosure: 499,000, down by 14,000 from September and down by 90,000 from a year ago.

--Properties in foreclosure pre-sale inventory: 267,000, down by 1,000 from September and down by 81,000 from a year ago.

--Properties 30 or more days past due or in foreclosure: 2.152 million, down by 165,000 from September and down by 458,000 from a year ago.

--States with the highest percentage of non-current loans: Mississippi, Louisiana, Alabama, West Virginia, Arkansas.

--States with the lowest percentage of non-current loans: Colorado, Oregon, Washington, Idaho, North Dakota.

--States with the highest percentage on seriously delinquent loans: Mississippi, Louisiana, Alabama, Arkansas, Tennessee.

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