While serious delinquencies felt the first impact from
the COVID-19 pandemic in June, overall delinquencies were actually lower. Black
Knight’s “first look” at loan performance during the month shows the national
delinquency rate, which rose more than 4 percentage points in May to 7.8
percent, edged down to 7.6 percent last month. The 89,000-loan decline (2.3
percent) was the first improvement in five months. The 4.03 million mortgages
that were 30 or more days past due but not in foreclosure still represented a 103.6
percent increase from a year earlier. Black Knight includes loans in forbearance
plans in their delinquency numbers.
As the initial wave of borrowers financially impacted
by the crisis missed their third mortgage payment, serious delinquencies, loans
90 or more days in arrears, soared. Their numbers were up 1.24 million to a
total of 1.87 million, the highest number since early 2011.
With foreclosure moratoria in place, the foreclosure
inventory, loans in process of foreclosure, were down by 8,000 to 192,000, the
lowest in records dating back to 2000. Foreclosure starts increased 15.7
percent compared to May, but they were still extraordinarily low at 5,900 and
down 85.3 percent year-over-year.
The number of non-current loans, a total of past-due loans
and foreclosures) fell by 97,000 in June to 4.226 million. This is an increase
of 2.017 million since June 2019.
The non-current loan rate was highest in Mississippi
at 12.5 percent, followed by Louisiana, New York, and New Jersey. Hawaii is now
also among the top five states. Its non-current rate has deteriorated by 184
percent over the last six months.
The prepayment rate in June was 2.7 percent, the
highest level in 16 years, fueled by record low mortgage rates and surging
refinance incentives. This is a monthly increase of 15.9 percent and up 134.0
percent from a year ago.
Black Knight will present more in-depth information on
June loan performance in its next Mortgage Monitor. It will be released
on August 3.