by Calculated Risk on 9/22/2023 01:43:00 PM

From Black Knight: Black Knight’s First Look: Mortgage Performance Remains Strong, but Slowing Improvement Suggests Delinquencies May Be Nearing Cycle Lows

• At 3.17%, the U.S. delinquency rate improved by 4 basis points in August and is nearly a full percentage point below its 2015-2019 same-month average

• However, steady slowing in the annual rate of improvement -- from -40% in early 2022 to -0.8% as of August – suggests delinquency rates may be nearing cycle lows

• Serious delinquencies (90+ days past due) continued to improve, falling 20K from July to 448K – still the lowest level since June 2006 – and down 151K (-25%) year over year

• Early-stage delinquencies, on the other hand, continued to trend upward, with both 30- and 60-day late populations inching up by 2K, marking the third consecutive monthly increase

• The number of loans in active foreclosure declined to 215K – the lowest level since March 2022 following the end of moratoria on such actions – and is down 68K (-24%) from pre-pandemic February 2020

• August’s 31.9K (+21.3% month over month) foreclosure starts – equating to 6.8% of serious delinquencies – were still 21% below August 2019 pre-pandemic levels

• While 6.9K foreclosure sales marked a 13% increase from July, volumes remain at roughly half pre-pandemic levels

• Prepayment activity (SMM) inched up to 0.53% under pressure from seasonal home buying patterns, while interest rates north of 7% continue to hold prepayment speeds at historically low levels
emphasis added

According to Black Knight's First Look report, the percent of loans delinquent decreased 1.2% in August compared to July and decreased 0.8% year-over-year.

Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 3.17% in August, down from 3.21% the previous month.

The percent of loans in the foreclosure process decreased in August to 0.41%, from 0.42% the previous month. 

   

The number of delinquent properties, but not in foreclosure, is up 12,000 properties year-over-year, and the number of properties in the foreclosure process is down 14,000 properties year-over-year.

Black Knight: Percent Loans Delinquent and in Foreclosure Process
	August 2023	July 2023
Delinquent	3.17%	3.21%
In Foreclosure	0.41%	0.42%
Number of properties:
Number of properties that are delinquent, but not in foreclosure:	1,684,000	1,700,000
Number of properties in foreclosure pre-sale inventory:	215,000	220,000
Total Properties	1,899,000	1,919,000