Prepayments increased in March, according to the latest data from Black Knight. While prepayments surged by 28% month over month, the highest month over month increase in 2.5 years, the delinquency rate dropped by by 5.3%.
Black Knight notes that despite the drop in delinquencies, this is the smallest improvement for any March in six years in what is typically the strongest-performing month of the year. March’s 39,700 foreclosure starts marked the lowest single-month volume in more than 18 years, while reduced outflow held active foreclosure inventory steady at 264,000. Additionally, outstanding 90-day delinquencies have now fallen below 500,000 for the first time in more than 12 years.
Mississippi tops Black Knight’s data in non-current loans, at 10.25%, followed by Louisiana at 7.94%. These two states also lead in their share 90-days delinquent borrowers. California and Idaho take the bottom two spots with 2.36% and 2.25% of borrowers non-current, respectively.
CoreLogic data reveals a similar story to Black Knight. According to the latest Loan Performance Insights Report from CoreLogic, mortgage delinquencies fell by 0.9% year over year in March. Frank Nothaft, CoreLogic Chief Economist cites recent employment increases as one reason for the improved loan performance.
"Income growth, home appreciation and sound underwriting combined have pushed delinquency rates to their lowest level in 20 years,” said Nothaft. “The low delinquency rates on home mortgages are a contrast to the rising delinquency rates on consumer credit. While home mortgage delinquency rates are at, or are near, their lowest levels in two decades, delinquency rates for auto and student loans are higher now than they were during the early and mid-2000s."
Overall delinquency rates have been declining. The foreclosure inventory fell by 0.2% year over year as of January 2019, down to 0.4%.
"As the economic expansion continues to create jobs and low mortgage rates support home buying this spring, delinquency rates are likely to trend lower during the coming year,” said Frank Martell, President and CEO of CoreLogic. “The decline in delinquency rates has occurred in nearly all parts of the nation."
Black Knight will release its full Mortgage Monitor report on Monday, May 6.