[1]May 2015 saw the largest month-over-month increase in delinquent residential mortgages for any May since 2009 and the largest month-over-month increase for any month since November 2014, according to Black Knight Financial Services [2]' May 2015 Mortgage Monitor [3] released on Monday.
Delinquent residential mortgages, defined as those 30 days or more overdue but not in foreclosure, jumped by 4 percent from April to May up to about 2.5 million, according to Black Knight. The delinquency rate has increased month-over-month in seven of the last 10 Mays (2006, 2008, and 2013 were the only months that saw declines); the May 2015 increase was the largest since May 2009, when it jumped by 4.5 percent.
May 2015's increase was also the largest month-over-month spike for any month since it jumped by 12 percent in November 2014. That month, just like May 2015, ended on a Sunday. According to Black Knight, months that end on a Sunday historically trigger increases in delinquency rates; the top five month-over-month increases in the last seven years have all come on months that ended on a Sunday, Black Knight reported.
Despite the frequent month-over-month delinquency rate increases in the month of May over the last few years, the delinquency rate declined by 12 percent year-over-year in May 2015, which calculated to about 326,000 fewer mortgages.
May's month-over-month rise in delinquencies was nearly an across-the-board increase through all product types, loan vintages, and credit score groups, according to Black Knight. The largest increase in delinquencies was seen among Federal Housing Administration/Veterans Affairs (FHA/VA) loans at 7.6 percent. The delinquency increase in FHA/VA loans increase was most more predominant loans with a post-crisis vintage (2009 through 2014), though the delinquency rate was consistent across loans with all LTV levels, according to Black Knight.
The delinquency rate increased month-over-month in May for option/adjustable rate mortgage (ARM) loans (5.2 percent), subprime mortgage loans (2.3 percent), Alt-A (between prime and subprime) loans (2.1 percent), FHA/VA loans (7.6 percent), and agency prime loans (2.8 percent). The one category that saw a month-over-month decline in delinquency rate was non-agency jumbo prime loans (minus 0.8 percent), according to Black Knight.