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Non-current Loans Lowest in 11 Years

UnderwaterMarch saw the lowest level of non-current inventory in 11 years, according to the Mortgage Monitor report released by Black Knight Financial Services on Monday. It also marked the fourth consecutive month the level has fallen below historical norms.

The states with the highest percentage of non-current loans were largely in the South, including Mississippi, Louisiana, Alabama, New Jersey, and West Virginia. The states with the lowest share were in the Midwest and Western U.S., including Idaho, Montana, Minnesota, North Dakota, and Colorado.

According to the Monitor, total U.S. loan delinquency for March was 3.62 percent—14 percent less than February’s numbers. The country’s foreclosure pre-sale inventory rate was 0.88 percent, a dip of nearly 5 percent over last month.

The month’s 30-day delinquency rate came in at more than 25 percent less than its 2000 to 2005 average. The serious delinquency rate, which includes loans that are 90 or more days past due, was also down, falling 14 percent for the quarter and 20 percent over the year. Serious delinquencies were still above historical average by about 25 percent. States with the highest percentage of seriously delinquent loans were Mississippi, Louisiana, Alabama, Arkansas, and Tennessee.

The number of loans under active foreclosure followed suit, dropping 7 percent in Q1 and 29 percent over last year, though they’re still way about what Black Knight calls “normal levels”—about 45 percent higher. There are about 250,000 more loans in serious delinquency or active foreclosure than a healthy market would normally allow.

In total, the quarter saw nearly 70,000 foreclosures completed—a 21 percent drop from a year ago, but a 12 percent increase over Q4 2016.

The Monthly Monitor also looked at HELOCs, finding that 1.5 million of all active HELOCs—or 19 percent—will be up for a reset this year. However, only one-fifth of those borrowers has less than 10 percent equity, which could pose a problem when seeking refinancing.

“For those still facing resets, however, equity continues to be a struggle,” the report stated. “One-third of borrowers whose HELOCs will reset in 2017 have less than 20 percent equity in their home, making refinancing problematic. One in five have less than 10 percent, and one in 10 are actually underwater.”

To view the full Monthly Monitor report, visit BKFS.com.

About Author: Aly J. Yale

Aly J. Yale is a longtime writer and editor from Texas. Her resume boasts positions with The Dallas Morning News, NBC, PBS, and various other regional and national publications. She has also worked with both the Five Star Institute and REO Red Book, as well as various other mortgage industry clients on content strategy, blogging, marketing, and more.
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