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Delinquency Rate Drops Below 5 Percent For First Time Since 2007

delinquent-noticeThe nationwide mortgage delinquency rate fell to an eight-year low following its largest month-over-month decline in nine years, according to Black Knight Financial Services' "First Look" at Mortgage Data for March 2015 released Wednesday.

The delinquency rate (percentage of residential mortgage loans 30 days or more past due but not in foreclosure) dropped to 4.70 percent for March (approximately 2.38 million loans), the first time the rate has been below 5 percent since August 2007. The rate fell by 12 percent since February, the largest month-over-month decline in nine years.

The percentage of loans 90 days or more delinquent but not in foreclosure also declined substantially month-over-month and year-over-year in March by 96,000 and 228,000, respectively, down to 971,000 loans. The number of residential properties with loans 30 days or more overdue or in foreclosure was 3.16 million for March, a decline of 350,000 from February and from 678,000 in March 2014.

Meanwhile, the monthly prepayment rate, which is historically a good indicator of refinance activity, increased by 40 percent from February to March and by a whopping 103 percent year-over-year in March, up to 1.62 percent.

Although foreclosure starts spiked by 18 percent month-over-month up to 94,100 for March, the overall picture for foreclosure data was bright. The foreclosure rate, or the percentage of residential mortgage loans in some state of foreclosure, declined by 27 percent year-over-year in March down to 1.55 percent. That represented approximately 782,000 loans, the lowest total since December 2007.

"Black Knight data shows that the national delinquency rate dropped 12 percent in March, marking the largest monthly decline in 9 years and pushing delinquencies below 5 percent for the first time since August 2007," said Trey Barnes, Black Knight’s SVP of Loan Data Products. "While foreclosure starts did spike 18 percent from the month prior, the increase doesn’t seem to be driven by seasonality or any other clear influencer. Starts are actually trending slightly downward over the past two years, so we may be looking at a one month anomaly in March."

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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