Black Knight’s First Look: Strong Decline in October Mortgage Delinquencies; Refis Pushes Prepayments to Highest Level in 6 Years

Black Knight, Jacksonville, Fla., said its First Look Mortgage Monitor reported the national mortgage delinquency rate fell to 3.39% in October, a nearly 7% decline from the past year and within 0.03% of the record low set in May.

The report said serious delinquencies fell by 10,000 from September, while the number of loans in active foreclosure edged up slightly (+3,000).

Meanwhile, prepayment activity climbed another 16% in October to the highest level since May 2013. Prepays are now up 134% year-over-year as refinancing homeowners continue to take advantage of low interest rates. However, Black Knight cautioned modest rises in 30-year rates in recent weeks, coupled with seasonal slowing in home sales, could dampen prepayment rates in coming months.

(Last week, the Mortgage Bankers Association issued its 3rd Quarter National Delinquency Survey, reporting delinquency rates for mortgage loans on one-to-four-unit residential properties fell to their lowest level since 1995. The NDS reported a seasonally adjusted rate of 3.97 percent of all loans outstanding at the end of the third quarter, down by 56 basis points from the second quarter and by 50 basis points from a year ago. The percentage of loans on which foreclosure actions were started in the third quarter fell by 4 basis points to 0.21 percent.)

Other Black Knight data for October:

–Total foreclosure pre-sale inventory rate: 0.48%, up by 1.05% from September but down by 6.21% from a year ago.

–Total foreclosure starts: 43,900, up by 11.42% from September but down by 13.2% from a year ago.

–Properties 30 or more days past due but not in foreclosure: 1.786 million, down by 68,000 from September and by 98,000 from a year ago.

–Properties 90 or more days past due by not in foreclosure: 433,000, down by 10,000 from September and by 66,000 from a year ago.

–Properties in foreclosure pre-sale inventory: 255,000, up by 3,000 from September but down by 12,000 from a year ago.

–Properties 30 or more days past due or in foreclosure: 2.041 million, down by 65,000 from September and by 111,000 from a year ago.

–States with highest non-current percentage: Mississippi, Louisiana, Alabama, West Virginia, Arkansas.

–States with the lowest non-current percentage: Colorado, Washington, Oregon, Idaho, California. –States with the highest 90-plus day delinquency rates: Mississippi, Louisiana, Alabama, Tennessee, Arkansas.