Mortgage Crisis Looms in USA

Mortgage Crisis Looms in USA

– Another 723,000 homeowners became past due on their mortgages in May, pushing the national delinquency rate to its highest level in 8.5 years

– There are now 4.3 million homeowners past due on their mortgages or in active foreclosure — including those in forbearance who have missed scheduled payments as part of their plans — up from 2 million at the end of March

– Serious delinquencies are on the rise as well, increasing by more than 50% over the past two months

– However, Black Knight’s McDash Flash Payment Tracker shows a higher share of payments have been made thus far in June than at the same time in May, suggesting the rise in delinquencies may be leveling off

– Both foreclosure starts and sales (completions), halted by COVID-19 moratoriums, remain at record lows

– The share of homeowners in active foreclosure has fallen to its lowest level on record since Black Knight began reporting the figure in January 2000

– COVID-19-related impacts on April purchase and refinance locks resulted in mortgage prepayments edging downward, but with 30-year rates near record lows, the potential for increased prepay activity remains

Black Knight, Inc. (NYSE:BKI) reports the following “first look” at May 2020 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 7.76%
Month-over-month change: 20.43%
Year-over-year change: 130.78%

Total U.S. foreclosure pre-sale inventory rate: 0.38%
Month-over-month change: -5.80%
Year-over-year change: -22.70%

Total U.S. foreclosure starts: 5,100
Month-over-month change: -31.08%
Year-over-year change: -86.92%

Monthly prepayment rate (SMM): 2.29%
Month-over-month change: -1.78%
Year-over-year change: 86.39%

Foreclosure sales as % of 90+: 0.09%
Month-over-month change: -19.57%
Year-over-year change: -95.09%

Number of properties that are 30 or more days past due, but not in foreclosure: 4,123,000
Month-over-month change: 723,000
Year-over-year change: 2,363,000

Number of properties that are 90 or more days past due, but not in foreclosure: 631,000
Month-over-month change: 169,000
Year-over-year change: 170,000

Number of properties in foreclosure pre-sale inventory: 200,000
Month-over-month change: -11,000
Year-over-year change: -55,000

Number of properties that are 30 or more days past due or in foreclosure: 4,324,000
Month-over-month change: 712,000
Year-over-year change: 2,309,000

Top 5 States by Non-Current* Percentage
Mississippi:                  12.73%
Louisiana:                    11.79%
New York:                    11.28%
New Jersey:                 11.03%
Florida:                         10.52%

Bottom 5 States by Non-Current* Percentage
Montana:                       5.13%
Oregon:                         5.12%
South Dakota:               5.02%
Washington:                  4.91%
Idaho:                            4.40%

Top 5 States by 90+ Days Delinquent Percentage
Mississippi:                    3.08%
Louisiana:                      2.37%
Alabama:                       2.04%
Arkansas:                      1.73%
Georgia:                        1.73%

Top 5 States by 6-Month Improvement in Non-Current* Percentage
Mississippi:                  21.92%
West Virginia:              24.15%
Arkansas:                    25.66%
Indiana:                       34.43%
Alabama:                     34.69%

Top 5 States by 6-Month Deterioration in Non-Current* Percentage
Alaska:                       255.65%
Nevada:                     236.37%
California:                   228.37%
Colorado:                   205.41%
Hawaii:                       175.59%

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.

Notes:
1)Totals are extrapolated based on Black Knight’s loan-level database of mortgage assets.
2)All whole numbers are rounded to the nearest thousand, except foreclosure starts, which are rounded to the nearest hundred.

For a more detailed view of this month’s “first look” data, please visit the Black Knight newsroom.

The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by detailed charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available online at https://www.blackknightinc.com/data-reports/ by July 6, 2020.

For more information about gaining access to Black Knight’s loan-level database, please send an email to [email protected].

About Black Knight
Black Knight (NYSE:BKI) is a leading provider of integrated software, data and analytics solutions that facilitate and automate many of the business processes across the homeownership lifecycle.

As a leading fintech, Black Knight is committed to being a premier business partner that clients rely on to achieve their strategic goals, realize greater success and better serve their customers by delivering best-in-class software, services and insights with a relentless commitment to excellence, innovation, integrity and leadership. For more information on Black Knight, please visit www.blackknightinc.com.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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