While delinquencies are still elevated,
especially those over 90 days, Black Knight’s “first look” at November data
notes a sixth consecutive monthly decline. The national delinquency rate dropped
from 6.44 percent in October to 6.33 percent, a -1.75 percent change. It
remains 79.20 percent higher year-over-year.
The rate has fallen 1.5 percentage points from its peak of 7.8 percent in
May but remains a full three percentage points (+93 percent) above pre-pandemic
At the end of the reporting period
there were 3.381 million mortgage loans that were 30 or more days past due but
not in foreclosure. This is down by 56,000 loans for the month, but 1.5 million
more delinquencies nationally than in November 2019. Black Knight includes
loans in active forbearance plans in its delinquency statistics.
The company says that, while
early-stage delinquencies – borrowers one or two payments past due – have
fallen back below pre-pandemic levels, seriously past-due (90+ days) mortgages
remain 1.75 million above pre-pandemic levels.
The foreclosure moratoriums put in
place at the beginning of the pandemic have kept many negative loan performance
metrics at low levels. The foreclosure inventory, loans in process of
foreclosure, is down by 2,000 loans since October and 72,000 since the previous
November. There are 176,000 loans in the current inventory and there were 4,400
foreclosure starts during the month. Both are at the lowest level since Black
Knight began reporting on them in 2000. The foreclosure sales rate, reported as
a percentage of loans over 90 days, was 0.07 percent. This is down 3.49 percent
and 95.76 percent for the month and on an annual basis.
Prepayments, which have been
extraordinarily high since interest rates started to decline, were down 11 percent
from the 16-year high set in October. Black Knight says, however, it expected
the single month mortality (SMM) rate, a measure of prepayments, to remain
elevated in coming months as low rates prompts a continued refinancing boom. The
rate in November was 2.82 percent.
Black Knight will provide more
details on the November loan performance in its Mortgage Monitor. It will be published
early in the New Year.