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Black Knight: Mortgage delinquency rate drops to 7-year low

Loans in foreclosure also dropped to 6-year low

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The mortgage delinquency rate declined in October to a seven-year low, according to Black Knight Financial Services’ “First Look” at the October mortgage data.

Per Black Knight’s data, the total loan delinquency rate dropped to 5.44% in October, down 4.14% from September and down 13.43% from the same time period last year.

Black Knight derives this data from reviewing its loan-level database, which represents approximately two-thirds of the overall market.

Additionally, foreclosure inventory fell more than 33% from last year’s total to the lowest level since February 2008. Foreclosure starts in October were also down by more than 10% from September’s figures, falling to 81,400, which was also down 31.48% from last year.

Black Knight also reported that the inventory of non-current loans dropped more than 800,000 in October from last year.

October also saw a rise in prepayments for the first time since July, which Black Knight said is “historically a good indicator of refinance activity.”

The latest Origination Insight Report from Ellie Mae shows just that. According to that report, refinances made up 40% of the total mortgage originations for the month of October, which marked a six-month high.

That’s up from 36% in September. The share of refinances was as low as 32% in July.

October’s jump in refinances reverses a trend that saw the share of refinances fall throughout 2014. In January, for example, the share of refinances was 47%.

Per Black Knight’s data, the number of properties that are 30 or more days past due, but not in foreclosure, fell by 119,000 in October to 2,759,000. That also represents a drop of 393,000 from last year.

According to Black Knight’s data, the top five states with non-current mortgages are:

Mississippi – 13.83%

New Jersey – 11.78%

Louisiana – 10.74%

New York – 10.33%

Florida – 10.17%

On the other hand, the five states with the lowest percentage of non-current mortgages are:

Montana – 3.72%

Colorado – 3.53%

South Dakota – 3.45%

Alaska – 3.2%

North Dakota – 2.3%

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