Black Knight: Initial Inflow of COVID-19-Related Delinquencies Has Likely Subsided


The U.S. mortgage delinquency rate (loans 30 days or more past due but not in foreclosure) decreased nearly 9% in July compared with June but remained up nearly 100% compared with July 2019, due to the COVID-19 crisis.

As of the end of the month about 6.91% of all mortgages – or about 3.692 million loans – were 30 days or more past due, according to Black Knight’s First Look report.

That’s a decrease about 342,000 compared with the previous month but an increase of about 1.885 million compared with a year earlier.

Black Knight notes that the month-over-month decrease in early-stage delinquencies suggests that the initial inflow of new COVID-19-related delinquencies has subsided.

Serious delinquencies (90 days or more past due but not in foreclosure), however, jumped about 376,000 in July compared with June, and were up by 1.806 million compared with July 2019.

Interestingly, the foreclosure pre-sale inventory rate continued to fall, dropping 1.8% month-over-month and 28% year-over-year to 0.36%.

As of the end of the month there were about 190,000 homes in the foreclosure pre-sale inventory, down about 2,000 compared with the previous month and down about 68,000 compared with a year earlier.

There were about 9,900 foreclosure starts in July, an increase of 67% compared with June but down 74% compared with July 2019.

Black Knight notes that foreclosure activity continues to remain muted due to widespread moratoriums.

Although foreclosure starts rose for the month, overall foreclosure activity remains near record lows.

The monthly prepayment rate stood at 2.73%, an increase of 2.8% compared with June and and increase of 91% compared with July 2019.

That’s the highest monthly prepayment rate since early 2004, as low rates continue to drive both refinance and purchase activity.

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