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For the first time in five months, the national delinquency rate improved, falling to 7.6% in June as the number of past-due mortgages fell by 98,000, according to Black Knight.
This comes after the delinquency rose from 3.2% in January to 7.8% in May.
Serious delinquencies—those 90 or more days past due—rose by more than 1.2 million as the initial batch of borrowers impacted by COVID-19 missed their third payment.
The 1.87 million mortgages labeled as seriously delinquent is the highest level since early 2011.
Active foreclosures continue to decline as foreclosure moratoriums are still in place. June’s 192,000 active foreclosures were the fewest on record dating back to 2000.
Additionally, prepayment activity hit its highest level in 16 years in June, which Black Knight states are fueled by record-low mortgage rates.
While there is good news nationally, pockets of the nation are still struggling. The Orange County Register reported that 6% of borrowers in Los Angeles and Orange counties in April were late 30 days or more, according to data from CoreLogic. This is a stark contrast from the 2.3% rate last year.
“[Southern California] is still faring relatively better than some parts of the country where delinquencies spiked to over 10% in April,” said Selma Hepp, Deputy Chief Economist, CoreLogic. “Nevertheless, the future trajectory of mortgage delinquencies will depend on the trajectory of the COVID-19 crisis. Recent spikes in new cases will have an impact on local economic outcomes and the ability of unemployed to return to work.”
The Orange County Register states that as of July 7, 10% of homeowners in Los Angeles and Orange County with a mortgage said they skipped or deferred the previous months’ payments, which is an improvement from April’s 12%.
Nationally, 13% of borrowers said they missed the payment vs. 11% in April.
The census found 9% of borrowers in Orange and Los Angeles counties will defer or have “no confidence” they can make their next mortgage payment.
