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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.

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at kyle.horst@thefivestar.com.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport, with more than six years of writing experience. She has served as Editor-in-Chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington. She has covered events such as the Byron Nelson, Pac-12 Conferences, the Women in Dallas Film Festival, to freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, she is an avid jazz lover and reader. She can be reached at demetria.lester@thefivestar.com.
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