Black Knight: Foreclosure Rate, Inventory End 2018 Below Pre-Recession Averages
Black Knight, Jacksonville, Fla., said all four major performance metrics in its Mortgage Monitor Report–delinquencies, serious delinquencies, active foreclosures and total non-current inventory–ended the year below 2000-2005 pre-recession averages for the first time since the financial crisis.
The report said both the national foreclosure rate and active foreclosure inventory have fallen below long-term norms; at the current rate of decline, both would reach near-record lows by the end of 2019. It said 576,000 foreclosures were initiated in 2018, the lowest such annual total in more than 18 years.
The report said first-time foreclosures were also at historic lows, with more than 60 percent of foreclosure referrals last year being repeat actions, the highest share ever recorded. Foreclosure sales (completions) hit a low of more than 18 years; 2018’s 175,000 foreclosure sales were down 25 percent from the year prior, and were 40 percent below their pre-recession average. Even repeats–though making up more than 60 percent of all foreclosures–were down 6 percent from 2017.
“Across the board, 2018 year-end numbers are good news from a mortgage performance perspective,” said Ben Graboske, president of Black Knight’s Data & Analytics division. “These year-end numbers are further proof of what we’ve been observing for some time now. The high credit quality and corresponding lower risk we’ve seen in the post-crisis origination market for the better part of a decade continues to pay dividends in terms of mortgage performance.”
Graboske added the low interest rate environment in place for so long had–until very recently – resulted in a refinance-heavy blend of originations for years. “Refis, as a whole, tend to outperform their purchase mortgage counterparts, which has boosted mortgage performance as well,” he said. “On top of that, we’ve had the benefit of strong employment and housing markets, which have helped the vast majority of homeowners meet their debt obligations, while those few who may have faced a possible default have gained enough equity to be able to sell rather than face foreclosure.”
Black Knight said as the average interest rate on a 30-year mortgage ticked down again in January, falling below 4.5 percent for the first time since April, it estimated 2.9 million homeowners in the “refinanceable” population, a 50 percent increase in rate/term refinance incentive over just the past two months.
Other report date:
–Total U.S. loan delinquency rate: 3.88 percent in December, a 4.71 percent increase from November.
–Total foreclosure pre-sale inventory rate: 0.52 percent, up by 1.19 percent in November.
–States with highest percentage of non-current loans: Mississippi, Louisiana, Alabama, West Virginia, Arkansas.
–States with lowest percentage of non-current loans: Colorado, Oregon, Washington, Idaho, North Dakota.
–States with highest percentage of seriously delinquent loans: Mississippi, Louisiana, Alabama, Arkansas, North Carolina.
