Roughly 2.1 Million Homeowners Remain 90+ Days Overdue

Black Knight has reported that in January 2021, the national mortgage delinquency rate fell to 5.9%, a 0.9% monthly drop from December 2020’s rate of 6.08%. This marked the first time since March 2020 when the national delinquency rate dipped below the 6% mark.

Recovery continues to crawl, but remains steady, as nearly 2.1 million U.S. homeowners remain 90 or more days past due, but not yet in foreclosure–1.7 million homeowners more than at the same time last year or five times pre-pandemic levels.

In an effort to 'deliver immediate relief' to homeowners during a national health crisis, President Joe Biden extended the national moratorium on home foreclosures for federally-backed mortgages through the end of June 2021. It was previously set to expire March 31, 2021.

Black Knight also found that foreclosure starts were down 86% year-over-year in January, with sales activity down more than 95%.

And while government intervention has reduced near-term risk, such actions will likely offset recovery times and extend the length of the housing recovery period. At the current rate of improvement, approximately 1.8 million U.S. mortgages will still be seriously delinquent at the end of June when foreclosure moratoriums on government-backed loans are currently slated to lift.

Also in January, Black Knight found that prepayment activity fell by 17% from December 2020, but was still more than 85% higher than it was at the same time last year.

Recent rate increases may further impact prepay rates, as last week, Freddie Mac's latest Primary Mortgage Market Survey (PMMS) showed the 30-year fixed-rate mortgage (FRM) hitting the 2.81% mark, up 0.08% over the previous week.