Mortgage Delinquency Rate Fell in February as Impact From Storms Waned

The national mortgage delinquency rate was at about 4.30% in February, a decrease of 0.21% compared with January but an increase of 2.10% compared with February 2017, according to Black Knight’s First Look report.

About 2.2 million properties were in delinquency (30 days or more past due but not in foreclosure) – down about 4,000 compared with January but up about 63,000 compared with a year earlier.

Roughly 697,000 properties were in serious delinquency (90 days or more past due but not in foreclosure) – a decrease of about 10,000 compared with January but an increase of about 56,000 compared with February 2017.

The year over year increase in delinquencies is due mainly to the impact of hurricanes Harvey, Irma and Maria, which struck in August/September, as well as the California wildfires which struck in October. However, the impact from the storms is starting to recede as homeowners rebuild and get their mortgage payments back on track. Government-sponsored enterprises Fannie Mae and Freddie Mac as well as the Federal Housing Administration have forbearance programs in place that offer protection for homeowners in the storm impacted areas who might have otherwise faced foreclosure.

States that had the highest percentage of non-current loans (30 days or more past due) in February included Mississippi (10.69%), Louisiana (9.11%), Florida (8.21%), Alabama (7.53%) and West Virginia (6.96%).

States that had the lowest percentage of non-current loans included Idaho (2.61%), Oregon (2.54%), Washington (2.52%), North Dakota (2.51%) and Colorado (2.10%).

States with the highest percentage of seriously delinquent loans (90 days or more past due) included Florida (3.84%), Mississippi (3.35%), Louisiana (2.60%), Texas (2.27%) and Alabama (2.13%).

About 128,000 hurricane-driven seriously delinquent mortgages remain in Texas, Florida and Georgia, according to the report.

The total U.S. foreclosure inventory rate was 0.65%, down 1.81% compared with January and down 30.30% compared with February 2017 to reach a new post-recession low.

As of the end of February there were about 331,000 homes in the foreclosure inventory pipeline, down about 6,000 compared with the previous month and down by about 139,000 compared with a year earlier.

There were about 46,700 foreclosure starts in February, down 25.04% compared with January and down 19.34% compared with February 2017. The decrease in foreclosure starts comes after they hit a 12-month high in January.

The prepayment rate was about 0.72%, a decrease of 8.93% compared with the previous month and a decrease of 10.58% compared with a year earlier. Rising interest rates pushed prepayment activity to the lowest level since 2014, Black Knight says.

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