The number of residential mortgage borrowers in a negative equity position during January 2015 was reported at slightly more than four million, which is a decline of 29 percent from the same period in 2014, according to Black Knight's March 2015 Mortgage Monitor released today. The four million underwater borrowers represented about 8 percent of all residential mortgage loans in the country during January 2015. A year earlier, 5.7 million borrowers were underwater, representing 11.4 percent of the nation's residential mortgages.
Within the underwater borrower population, 29 percent of those borrows are seriously delinquent on their mortgages and 66 percent of seriously underwater borrowers are either 90 or more days delinquent on their mortgages or in foreclosure. Underwater borrowers comprise about 75 percent of the nation's seriously delinquent and foreclosure inventory. Approximately one in every three borrowers that were currently in foreclosure had a current loan-to-value ratio of 150 percent or greater, which means they owe at least 50 percent more than the value of their homes.
HUD has issued a memo rescinding a mortgagee letter written by the Department in January that amended the rules regarding foreclosure on a non-borrowing spouse with a reverse mortgage following the death of the last surviving borrower. Under new guidelines, reverse mortgage lenders will have the option to delay the beginning of foreclosure proceedings on a non-borrowing spouse in certain cases for up to 60 days for HECMs with case numbers issued prior to August 4, 2014. Lenders have the option of exercising this option effective immediately.