Black Knight: Florida No Longer ‘Foreclosure Capital of U.S.’

Black Knight Financial Services, Jacksonville, Fla., said after eight years, Florida relinquished its title, if not perception, as the “Foreclosure Capital of the U.S.”  

The company’s First Look Mortgage Monitor report said New York surpassed Florida the third quarter with the most loans in active foreclosure. Black Knight Data & Analytics Senior Vice President Ben Graboske said over the past 12 months, Florida reduced its inventory of loan in active foreclosure by 43 percent, nearly double the national average (22.5 percent).  

“Florida’s not out of the woods just yet–it still has the largest number of properties 90 or more days past due but not yet in foreclosure,” Graboske said. New York–which has seen only a 19 percent reduction in its foreclosure inventory over the past year–has now taken Florida’s place as the state with the most loans in active foreclosure.”  

Black Knight said while foreclosure starts were up slightly from the second quarter, driven by a rise in repeat foreclosure starts, first-time foreclosure starts in the third quarter were at their lowest level in more than 10 years and 35 percent below 2005 pre-crisis levels. Foreclosure sale volume (i.e., completed foreclosures) in the third quarter fell by 10 percent from the second quarter and reached the lowest level since 2006. Both 30-day and 60-day delinquencies saw quarterly increases due to market seasonality in third quarter, rising 4.7 and 5.6 percent, respectively, while 90-day delinquencies continued their long-term trend of improvement, declining 4.3 percent for the quarter and more than 25 percent from last year.  

Other report data:

–Total U.S. loan delinquency rate: 4.87 percent, a month over month increase of 1.70 percent. Total U.S. foreclosure pre-sale inventory rate: 1.46 percent, a month over month drop of 1.53 percent.

–States with highest percentage of non-current loans: Mississippi; New Jersey; Louisiana; Maine; and New York.

–States with the lowest percentage of non-current loans: Montana; South Dakota; Minnesota; Colorado; and North Dakota.

–States with highest percentage of seriously delinquent loans:  Mississippi; Louisiana; Alabama; Rhode Island; and Maine.  

The report said purchase mortgage originations surged in 2015, with the second quarter up by 15 percent from a year ago and the third quarter up by 11 percent so far. Black Knight said June saw the largest purchase loan volume (and residential home sales) since 2007, driven almost entirely by high-credit (FICO scores of 700-plus) borrowers. Just 20 percent of purchase originations over the past three months came from borrowers with credit scores below 700, the lowest level in more than 10 years.  

The report also noted that refinance originations continued to decline steadily, a pattern in place since March. Graboske said this indicates a degree of “burnout,” as those both interested and able to take advantage of currently low interest rates likely already have refinanced.