The 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.
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."