Mortgage Performance Continues to Improve; Prepayment Numbers Rise


It was a year of significant improvement in the distressed
home arena.  According to Black Knight
Financial Services there was a 22 percent decrease in the national Foreclosure
Inventory while the number of delinquent mortgages declined by nearly 15 percent.

The number of mortgages that were 30 or more days past due
but not in foreclosure declined to 4.8 percent of all active mortgages, a 14.98
percent improvement for the year and 3 percent from November to December.  At year’s end 2.41 million mortgages remained
delinquent, 425,000 fewer than at the end of 2014.

Of those, 808,000 mortgages were seriously delinquent – that
is 90 or more days past due but not in foreclosure – at year’s end.  This is 19,000 fewer than in November and
280,000 less than a year earlier.  The
decline reverses increases in both October and November in the 90-day plus rate.

There were 689,000 properties in the process of foreclosure
at the end of December, down by 9,000 or 1.0 percent from November and by
192,000 or 21.85 percent year-over-year. The foreclosure inventory rate
(inventory as a percentage of active mortgages) was 1.37 percent.

The total of all distressed properties – delinquent and in
foreclosure – was 3,097,000 following a 92,000 drop from November to December
and represented a reduction of 618,000 since December 2014. 

Black Knight said the prepayment rate in December,
historically a good indicator of refinance activity, rose 24 percent from
November and was 1.29 percent higher than a year earlier.  The company said the November performance had
been “lackluster.”

Foreclosures rose to a rate of 1.87 percent of all
properties 90 days or more delinquent, a 5.87 percent change from November and a
27.82 annual increase.  This is often
viewed as a positive sign that local jurisdictions are moving more rapidly to
clear out foreclosure backlogs.

The only bad news nationally was for foreclosure starts
which were up more than 17 percent from the post-housing crisis low reached in
November with 78,100 filings.  That was still
15 percent lower than a year earlier.

The states that continue to hold on to some of the worse
mortgage performance statistics still posted improvement year over year.  Mississippi has the highest non-current rate,
12.33, but that improved by 13.12 percent in 2015.  New Jersey still has a 10.13 percent
non-current rate and New York is at 8.79 but both rates have dropped more than
18 percent. The third and fourth highest rates are in Louisiana and Maine but
the former improved by 9.25 percent to 9.90 percent and the latter’s rate
dropped by 12.62 percent to 8.90 percent.

The data comes from Black Knight’s First Look, a regular
preview from its Mortgage Monitor.  The Monitor
for December will be published in early February.

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