Black Knight: Delinquencies at Record Low: MBA to Release National Delinquency Survey Friday

Ahead of this Friday’s release of the Mortgage Bankers Association’s 1st Quarter National Delinquency Survey, Black Knight, Jacksonville, Fla., said just 217,000 homeowners became past due on their mortgages in March, the lowest such delinquency inflow of any month on record.

The company’s March Mortgage Monitor Report also reported cures spiked in March as a variety of calendar and economy-driven factors resulted in the second largest delinquency rate decline ever recorded. Loans 30 days past due fell 34% from February and 50% from the same time last year to a record low, with 60-day delinquencies below pre-pandemic levels and near-record lows as well.

The report also noted through April 23, 91.6% of mortgage holders had made their mortgage payments, up from 91% in March to the largest share for any month since the onset of the pandemic. Black Knight Data & Analytics President Ben Graboske said should this trend hold true through April’s final week, another improvement in overall delinquent loan volumes is likely to be seen when month-end data is reported in mid-May.

“Not only did March see the largest single-month improvement in delinquencies in 11 years, but all indications suggest more is yet to come,” Graboske said. “Several factors contributed to particularly strong mortgage performance in March, including the distribution of 159 million stimulus payments totaling more than $376 billion, broader economic improvement leading to nearly a million new jobs and 1.2 million forbearance plans reviewed for extension or removal, resulting in an 11% decline in plan volumes in the last 30 days.

Graboske noted as many early forbearance plan adopters shifted to post-forbearance waterfalls to get back to performing on their mortgage payments, inflow continued to steadily improve as well. “And, of the 7.1 million homeowners who have been in COVID-19 forbearance at one point or another, performance among those who have left plans has generally been strong,” he said.

However, Graboske noted while overall sentiment for an economic recovery in 2021 remains robust, “mortgage performance is expected to run into seasonal headwinds for most of the remainder of the year, which could marginally dampen overall improvement rates.”

The report said borrowers with a single payment past due fell by 34% from February and is now down 50% from the same time last year a record low in March. Though 60-day delinquencies are also now back below pre-pandemic levels and near record lows as well, homeowners 90 or more days past due remains nearly five times what it was prior to COVID. Graboske said one possibility for early-stage delinquencies falling well below pre-pandemic levels could be an elevated share of borrowers are rolling forward to later stages of delinquency – when they otherwise might not – due to participation in available forbearance programs.

MBA will release its 1st Quarter National Delinquency Survey this Friday, May 7. The NDS, conducted since 1953, covers 39 million loans on one- to four- unit residential properties. Loans surveyed were reported by more than 100 servicers, including independent mortgage companies and depositories such as large banks, community banks and credit unions.

MBA Vice President of Industry Analysis Marina Walsh, CMB, will provide commentary and analysis. MBA NewsLink will produce a special late morning edition this Friday, May 7.