Mortgage Delays Drop To Pre-Recession Level: Black Knight

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The share of overdue mortgage borrowers has not yet fallen to pre-pandemic levels, but has now reached a point where it is not all that unusual from a historical point of view.

According to the latest Black Knight report at a glance, the June rate of late payments of 4.4%, which includes borrowers with payments incurred due to the hardships of the coronavirus, is within a range that was considered normal in the pre-housing collapse. mid-August. This rate, excluding the foreclosures, decreased from 4.7% in the previous month and 7.6% a year earlier. Before the arrival of the coronavirus in the United States, the crime rate was 3.4%.

The relatively low proportion of borrowers who ran into trouble in the last month adds signs that way out of the pandemic aid cannot lead to overwhelming wave of foreclosures.

“Watching the national delinquency rate fall below the pre-Great Recession average shows how strong the recovery trend has been,” Andy Walden, vice president of market research at Black Knight, said in an email.

The pre-Recession delinquency rate may have been slightly higher than in recent years because underwriting was relatively looser and less regulated back then. Just before the pandemic, the disaster was unusually low due to sustained economic growth and tight guarantees.

In this context, the actual number of problem loans still looks relatively high. While mortgages overdue by 90 days or more (but without foreclosures) also fell in June, their numbers were still nearly four times their pre-pandemic level at over 1.5 million. By comparison, there were 1.67 million serious late payments. in May. At the current rate of decline, 1 million of these borrowers may still be worried when a large number of abstinence plans expire.

The rate at which borrowers are late 90 days or more also fell in June to 2.9% from 3.1% in May. In June 2020, the serious delinquency rate was 3.5%. Before the pandemic, it was less than 1% and has not exceeded 2% since 2015. At its peak in early 2010, the serious delinquency rate was 5.4%.

While the overall mortgage crisis is shrinking, the relatively high regional concentrations do exist, and in some cases these areas were also hit hard during the Great Recession.

The five highest serious delinquency rates in individual states in June, excluding foreclosures, were: Mississippi – 4.89%; Louisiana – 4.59%; Hawaii – 4.14%; Nevada – 4.14%; and Maryland – 4.04%.

The share of loans in active foreclosure fell to another record low in June – 0.27%. Foreclosures were limited by prohibitions, which generally only allowed those associated with vacant real estate to continue construction.





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