The years-long downward trend of
mortgage delinquencies appears to have come to an abrupt end in April. Black
Knight, in its “first look” at the month’s loan performance data, said the national
delinquency rate shot up 90 percent compared to March and is 86 percent higher
than in April 2019 at 6.45 percent.
That rate indicates the percentage
of active loans that were 30 days or more past due but not in foreclosure with 3.40
million loans in that category, 1.61 million more than the prior month and 1.59
more than in April 2019. Black Knight reported earlier this month that, as of
April 30, more than 3.8 million home mortgages had entered forbearance plans.
They subsequently reported that some 46 percent of borrowers in forbearance at
the end of April, had continued to make at least part of their April payment
Black Knight counts mortgages for
which payments have not been made as delinquent, even if they are in
forbearance and servicers are not reporting them to credit bureaus under rules
established by the CARES Act. This means that some of the early stage
delinquencies are not in forbearance and that many that are continue to
Longer term delinquencies, those 90
or more days past due but not in foreclosure, increased at a nearer to normal
rate, rising 56,000 from the prior month and falling by 12,000 loans compared
to a year earlier. There were 462,000 loans that were seriously delinquent but not
in foreclosure in April.
measures continue to trend down. The number of properties in the foreclosure
inventory fell by 9,000 for the month and 48,000 on an annual basis to 211,000.
Foreclosure starts dropped 73 percent from the March number, reflecting in part
the foreclosure moratorium put in place by the CARES act. The 7,400 starts that
did occur were 82 percent fewer than a year earlier. Actual foreclosure sales
fell 94 percent over that annual period.
At the end of April there were 3.6
million homeowners who were past due on their mortgages including those in
foreclosure. This was the largest number since January 2015.
The highest rates of delinquency
were, as usual, in Mississippi and Louisiana at 11.0- percent and 10.91 percent
respectively. New York, New Jersey, and Connecticut, three of the states with
the highest rates of COVID-19 made up
the rest of the top five with double digit increases in their non-current rate
of 90, 106, and 76 percent respectively
The single month mortality (SMM) or
prepayment rate, a measure of potential refinance activity, continued to rise
in April, up 23 percent from March and 136 percent year-over-year. The rate was
2.33 percent of active loans.
Black Knight will release more
detailed information on April loan performance in its Mortgage Monitor. It is
scheduled for publication on June 8th.