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Southern States Dominating Non-Current Loan Volumes

Southern states including Mississippi, Louisiana, Alabama, and Arkansas held some of the largest volumes of non-current loans in the country. As of December 2019, Mississippi holds the highest volume at 9.99%, though this is a month-over-month decline from November’s 10.44%, and a 0.93% decline year-over-year, according to Black Knight’s First Look at December 2019 data.

All top five states in non-current percentages have seen marked declines over the year, with the biggest decline in Louisiana, where the non-current percentage fell by 6.81% from December 2018.

The lowest non-current percentages, meanwhile, remain concentrated on and around the East Coast, with Colorado still holding the lowest rate at 1.74%, down from November’s rate of 1.81%. Behind Colorado falls Washington (1.77%), Oregon (1.84%), Idaho (1.91%), and California (2.01%).

As non-current loans have fallen across the country, default notices, scheduled auctions and bank repossessions as foreclosure filings fell too. According to the Year-End 2019 U.S. Foreclosure Market Report from ATTOM Data Solutions, foreclosure actions were down 21% from 2018 and down 83% from a peak of nearly 2.9 million in 2010.

Repossessions dropped as well in 2019, down 37% from 2018 to 143,955 total properties.

“The continued decline in distressed properties is one of many signs pointing to a much-improved housing market compared to the bad old days of the Great Recession,” said Todd Teta, Chief Product Officer for ATTOM Data Solutions. “That said, there is some reason for concern about the potential for a change in the wrong direction, given that residential foreclosure starts increased in about a third of the nation’s metro housing markets in 2019. Nationally, the number also ticked up a bit in December. While that’s not a major worry, it’s something that should be watched closely in 2020.”

Black Knight also noted that repayment activity ticked upward at the end of 2019, indicating a “flattening effect on refinance activity.” After falling by 19% in November, prepayment rates increased in December, and Black Knight suggests that the recent leveling off of interest rates has had a flattening effect, but prepayments are still up 126% from this time last year.

Black Knight will release its complete December 2019 Mortgage Monitor report on on Monday, February 3.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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