The market continued to show significant, sustained improvement in the nation’s inventory of delinquent mortgages for the fourth consecutive year in a row in 2013, along with recording the second consecutive year of significant improvement for those in foreclosure, the latest Black Knight Financial Services report found.
“In many ways, 2013 marked an abatement to crisis conditions in the U.S. mortgage market,” said Herb Blecher, senior vice president of Black Knight Financial Services’ data & analytics division.
“Delinquencies neared pre-crisis levels, foreclosure inventory declined 30% over the year, new problem loan rates improved in both judicial and non-judicial foreclosure states, and foreclosure starts ended the year at the lowest level since April 2007,” Blecher added.
2013 was also the best year for property sales since 2007, with totals through November outnumbering the full year totals for each of the prior three years.
However, Blecher explained higher interest rates and seasonality pushed monthly originations to the lowest level since 2008, and the current interest rate environment seems to have also brought an end to the refinancing wave we’ve observed for the last several years.
Meanwhile, national home price levels increased 8.5% year-over-year through November 2013.
“We did see home prices in judicial states generally recovering at a slower pace than their non-judicial counterparts. A similar situation existed with regard to negative equity improvement, which also occurred more slowly in those areas with extended foreclosure processes,” Blecher said.
In addition, 75% of loans that are either seriously delinquent or in foreclosure are underwater, which has had a pronounced effect on reducing overall negative equity numbers.