Of the approximately 952,000 borrowers who are 90 or more days past due but not yet in foreclosure, 62% have been through some form of home retention program, according to the Black Knight Data & Analytics' April Mortgage Monitor Report.
Although the rate of retention actions has declined over the past two years, these actions are making up a greater share of that seriously delinquent inventory, explains Ben Graboske, senior vice president of Black Knight Data & Analytics.
‘In analyzing the data around home retention initiatives, we found that nearly one in five seriously delinquent borrowers are currently taking part in an active trial modification or payment plan,’ says Graboske.
‘With 62 percent of loans 90 or more days delinquent but not yet in foreclosure having been through some form of home retention action, we're currently seeing the highest level of saturation yet. But, that's only marginally up from last year – in other words, that saturation level is beginning to flatten.’
Further, Graboske says the report showed some redundancy with this activity: 70% of all new trial modifications and repayment plans have previously been through one or more home retention actions.
Black Knight found that Washington, D.C., led the nation with 67% of its seriously delinquent inventory having gone through some sort of home retention activity. Of these properties, 26% are currently in an active trial modification or repayment plan.
Maryland, Georgia, Texas and Connecticut followed – all finding 66% of their seriously delinquent inventory involved in some form of home retention action.
At the national level, 53% of loans in active foreclosure had taken part in home retention initiatives.
The report shows that although there has been significant improvement in both seriously delinquent and active foreclosure inventories, they still remain two and three times their pre-crisis norms, respectively, with 28% of the remaining inventory located in just three states: Florida, New York and New Jersey.
‘Of these three states, Florida has seen the most improvement, with a 37 percent decline in inventory over the last year and a 63 percent drop over the last two years,’ Graboske says.
‘On the other hand, low foreclosure completion rates in New York and New Jersey have contributed to lingering inventory in those states. Looking at pipeline ratios – the length of time it would take to work through the backlog at the current rate of foreclosure completions – we see New York and New Jersey with nearly 13 and nine years of inventory, respectively,’ Graboske adds.
To read the full report, click here.