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Mortgage Delinquencies Dip, Foreclosure Starts Spike

past-due-mortgageMortgage delinquencies dropped 8.6 percent between December and January, but remained up year-over-year, according to the latest First Look at January mortgage performance data from Black Knight, Inc.

Black Knight cites calendar-related effects and a continued decrease in hurricane-related delinquencies for driving the number of past-due mortgages down in January 2018. As Black Knight’s data explains, December ended on a Sunday, meaning payments could not be processed on the final two days of the month. This helped artificially inflate the December delinquency rate, which explains in part why January saw such a sharp decline. When combined with the fact that there were fewer hurricane-related delinquencies, this drove a decrease of 210,000 past-due mortgages between December and January.

Nevertheless, the delinquency rate was still elevated year-over-year—up 1.6 percent compared to January 2017. Moreover, while hurricane season’s impact on delinquencies continues to diminish, things certainly have not completely stabilized. Black Knight reports that there are still 146,000 loans in some stage of delinquency as a result of Hurricanes Harvey and Irma, 132,000 of which are now seriously delinquent.

Black Knight also provided an early look at January data on the Puerto Rico mortgage market, which, like much of the island, was severely impacted by Hurricane Maria. According to Black Knight, 57,000 loans are still delinquent as a result of Maria, with 49,000 of them more than 90 days past due.

Many of the delinquent homes in Puerto Rico were granted extra time in the form of widespread foreclosure moratoria. However, many of these moratoria are beginning to expire, resulting in a spike in January foreclosure starts as these loans reverted to foreclosure status. Foreclosure starts came in at 62,300 for the month of January, marking a 12-month high, although Black Knight points out that “this reflects that procedural shift and not the resuming of active foreclosure actions (though suggests that is a possible scenario when the moratoria do officially end).”

The population of loans in active foreclosure increased by 6,000 from December to January. Also, the share of seriously delinquent/active foreclosure population that moved through to foreclosure sale (completion) in January climbed 42 percent from December, although Black Knight notes that December’s numbers were artificially low due to the annual holiday season moratorium on foreclosures.

The top 5 states in terms of 90+ days delinquent percentage were Florida (3.96 percent), Mississippi (3.37 percent), Louisiana (2.68 percent), Texas (2.33 percent), and Alabama (2.13 percent).

You can read Black Knight’s full January First Look at January mortgage performance data by clicking here.

About Author: David Wharton

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