After spiking in November, delinquencies dropped by 7.2% in December, bringing the national delinquency rate back under 6% and down to 5.6% for the month, and nearly 13% down from this time last year, according to the latest report from Black Knight Financial Services.

However, while early stage delinquencies dropped by 220,000 from the previous month, the number of loans 90 days or more delinquent decreased by 31,000 in December.

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(Source: Black Knight)

Meanwhile, prepayments – historically a good indicator of refinance activity – jumped more than 25% from November, reaching the highest level since August 2013.
The inventory of loans in foreclosure continued its decline, ending December at 820,000, down nearly 35% from the end of 2013.

Foreclosure starts, on the other hand, saw a 21% month-over-month increase; starts were still down almost 15% from last December, though.