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Black Knight: National Mortgage Delinquency Rate Decreased in January; "Foreclosure Starts Surge"

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by Calculated Risk on 2/24/2022 12:01:00 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: Foreclosure Starts Surge Sevenfold in January, Hitting Highest Level in Two Years; Though Volumes Rising, Still 20% Below Pre-Pandemic Levels

o Foreclosure starts rose sharply in January as borrower protections in place throughout the economic recovery begin to roll off, with 32,900 loans referred to foreclosure in the month

o While up significantly from December’s 4,100, January’s start volume was still more than 20% below the 42,800 in January 2020, prior to the onset of the COVID-19 pandemic

o Roughly half of the month’s starts were among borrowers who were already delinquent prior to the economic impacts of COVID-19, and half from borrowers who became past due in March 2020 or later

o In turn, the national foreclosure rate rose to its highest level since May 2021 (0.28%) – still nearly 40% below its pre-pandemic level, with foreclosure sales (completions) 70% below January 2020 levels

o At the same time, the national delinquency rate continued to improve, and the number of seriously past due mortgages fell by 87,000 (-9%) as borrowers leaving forbearance plans returned to making payments

o A backlog of post-forbearance loans in active loss mitigation – plus another 379,000 that have finished loss mitigation but remain past due – calls for a close watch on foreclosure metrics in coming months

o Prepayment activity hit a more than two-year low, falling by 24% from the month prior as rising rates continue to put sharp downward pressure on refinance incentive

emphasis added

According to Black Knight’s First Look report, the percent of loans delinquent decreased 2.3% in January compared to December and decreased 44% year-over-year.

The percent of loans in the foreclosure process increased 16.5% in January and were down 13% 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 3.30% in January, down from 3.38% in December.

The percent of loans in the foreclosure process increased in January to 0.28%, from 0.24% in December.

The number of delinquent properties, but not in foreclosure, is down 1,372,000 properties year-over-year, and the number of properties in the foreclosure process is down 22,000 properties year-over-year.

Black Knight: Percent Loans Delinquent and in Foreclosure ProcessJan
2022Dec
2021Jan
2021Jan
2020Delinquent3.30%3.38%5.85%3.22%In Foreclosure0.28%0.24%0.32%0.46%Number of properties:Number of properties
that are delinquent,
but not in foreclosure:1,758,0001,799,0003,130,0001,705,000Number of properties
in foreclosure
pre-sale inventory:149,000128,000171,000246,000Total Properties1,907,0001,927,0003,301,0002,047,000

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