Mortgage delinquencies rose to 3.73% in June from the prior month’s record low, according to Black Knight. The 11% spike was the biggest gain in almost a decade, but it’s nothing to worry about, the mortgage-data firm said in a Monday report.
It’s “calendar-related,” Black Knight said.
“The month ended on a Sunday, which means servicing operations are closed on the last two calendar days of the month and cannot process last-minute payments,” Black Knight said in the report. Sunday month-ends have contributed to nine of the 10 largest single-month delinquency gains over the last seven years, it said.
The month of June has ended on a Sunday three times in the past two decades. The last two, 2002 and 2013, saw an average monthly delinquency rate increase of 11%, matching this June’s increase, the report said.
On the reverse end of the data blip, this month will get some help from the calendar. Months that follow those pesky Sunday-ends usually see improvements, Black Knight said.
“Delinquencies tend to improve in the month following a Sunday month-end, which may help to counter the seasonal rise typically seen in July,” the report said. The delinquency rate includes all mortgages 30 days past due but not in foreclosure.
Another reason not to worry about June’s spike in delinquencies is: the previous month saw mortgage delinquency fall to a record low, so the increase is coming off a very low bottom. Late payments fell to 3.36% in May, the lowest ever recorded in data that goes back to 2000, Black Knight said last month.
A total of 120,000 new foreclosures were recorded in the three months ended in June, down 7% from the prior three months and down 12% year-over-year, Black Knight said. It was the lowest quarterly number of so-called foreclosure starts since the turn of the century, the company said. First-time foreclosure starts were down 20% year-over-year, while repeat foreclosures saw a 7% decline.
Mississippi had the highest number of new foreclosures of any state in 2019’s second quarter, with one in every 180 active mortgages entering foreclosure, followed by Louisiana at 1 in 219, the report said.
On the other end of the spectrum, Colorado had the fewest new foreclosures of any state at one in 1,199 mortgages, followed by Washington at one in 1,000 and California at one in 939.