Black Knight reports another
breathtaking increase in mortgage delinquencies in its “first look” at May loan
performance data. The rate, which soared by 90 percent in April, grew another
20.4 percent, to 7.76 percent of all active mortgages. This puts the rate,
which had been declining continually to near all-time lows before the impact of
the COVID-19 pandemic, up by 130.8 points from May 2019. This is the highest delinquency
rate since late 2011.
There was a total of 4.123 million
loans that were 30 days or more past due in May, 723,000 more than in April and
2.36 million more than a year earlier. It this includes loans that were in a
forbearance plan and did not make a May payment but does not include loans in
foreclosure. Under provisions of the CARES Act, loans in forbearance that miss
payments are not reported to the credit bureaus. Black Knight notes that the May
increase was less than half the number of borrowers who transitioned from
current to non-current in April, 1.6 million.
Serious delinquencies are also on
the rise. There were 631,000 homeowners who were 90 or more days past due but
not in foreclosure at the end of May. Serious delinquencies increased by an
aggregte of 50 percent in April and May and were 170,000 higher than a year
To this point, late stage delinquencies
have continued to slide. The foreclosure inventory, loans that are in process
of foreclosure, numbers 200,000, 11,000 fewer than in April and down 55,000 year-over-year
and foreclosure starts, at 5,100 were down 31.1 percent and 86.4 percent from
the two earlier periods. The foreclosure inventory rate is 22.7 percent below
its May 2019 level. The foreclosure rate was 0.9 percent, a number based on
loans 90 or more days past due. This is a 19.6 percent decline from April and down
95.1 percent on an annual basis. CARES, in addition to requiring servicers to
offer forbearance plans, also puts a moratorium on most foreclosure activity.
The number of non-current loans,
including those in foreclosure, at the end of May was 4.32 million. However,
Black Knight says that a higher share of June payments had been made at the
point their report was written than May payments at the same point that month.
This suggests that the rise in delinquencies may be leveling off. Still, the
share of homeowners in forbearance who continue to make mortgage payments is
declining. Forty-six percent of forborne borrowers made their April payments;
26 percent paid in May, but as of June 15, the rate was only 15 percent.
Delinquency rates have more than
doubled in some states. Oregon’s rate rose 169 percent year over year;
Washington’s is up 148 percent; Florida’s increase was 155 percent and New
Jersey rose 150 percent.
Black Knight will provide May loan
performance information in a more detailed form in its Mortgage Monitor report.
It will be available on July 6.