Foreclosure Starts Jump Sevenfold

As predicted, foreclosure starts jumped after a quiet holiday season in January, as additional COVID-19 protections wore off leading lenders to start the process on 32,900 borrowers. 

The jump of 28,800 loans, from the 4,100 seen in December, was the biggest seen in months. According to Black Knight, roughly half of the month's starts were among borrowers who were already delinquent prior to the economic impacts of COVID-19, and half from borrowers who became past due in March 2020 or later. 

While foreclosure starts have increased, the national foreclosure rate has also risen to 0.28%, its highest level since May 2021. This is nearly 40% below its pre-pandemic level, with foreclosure sales (completions) 70% below January 2020 levels. 

“The national delinquency rate continued to improve, and the number of seriously past due mortgages fell by 87,000 (-9%) as borrowers leaving forbearance plans returned to making payments,” Black Knight said. “A backlog of post-forbearance loans in active loss mitigation—plus another 379,000 that have finished loss mitigation but remain past due—calls for a close watch on foreclosure metrics in coming months” 

Other statistics included with the report include:
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 3.30%
Month-over-month change: -2.37%
Year-over-year change: -43.62% 

Total U.S. foreclosure pre-sale inventory rate: 0.28%
Month-over-month change: 16.48%
Year-over-year change: -12.69% 

Total U.S. foreclosure starts: 32,900
Month-over-month change: 702.44%
Year-over-year change: 457.63% 

Monthly prepayment rate (SMM): 1.26%
Month-over-month change: -23.85%
Year-over-year change: -52.19% 

Foreclosure sales as % of 90+: 0.36%
Month-over-month change: 21.02%
Year-over-year change: 331.92% 

Number of properties that are 30 or more days past due, but not in foreclosure: 1,758,000
Month-over-month change: -41,000
Year-over-year change: -1,372,000 

Number of properties that are 90 or more days past due, but not in foreclosure: 859,000
Month-over-month change: -87,000
Year-over-year change: -1,231,000 

Number of properties in foreclosure pre-sale inventory: 149,000
Month-over-month change: 21,000
Year-over-year change: -22,000 

Number of properties that are 30 or more days past due or in foreclosure: 1,907,000
Month-over-month change: -20,000
Year-over-year change: -1,394,000 

Top Five States by Non-Current* Percentage 

1. Mississippi: 6.94% 
2. Louisiana: 6.88% 
3. West Virginia: 5.28% 
4. Alabama: 5.12% 
5. Oklahoma: 5.03%                                                    

 Bottom Five States by Non-Current* Percentage 

1. Utah: 2.19% 
2. California: 2.06% 
3. Colorado: 2.01% 
4. Washington: 1.95% 
5. Idaho: 1.85% 

 Top Five States by 90+ Days Delinquent Percentage 

1. Louisiana: 3.44% 
2. Mississippi: 3.13% 
3. Alabama: 2.31% 
4. Arkansas: 2.27% 
5. West Virginia: 2.25%                                                                                    

 Top Five States by Six-Month Improvement in Non-Current* Percentage 

1. Hawaii: -43.39% 
2. California: -33.34% 
3. Nevada: -32.44% 
4. Washington: -27.28% 
5. District of Columbia: -26.72%                                                                                

 Top Five States by Six-Month Deterioration in Non-Current* Percentage 

1. Louisiana: -0.73% 
2. Michigan: -5.03% 
3. Iowa: -6.06% 
4. Alabama: -6.99% 
5. Kentucky: -7.41% 

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. 

To read the full report, click here.