Foreclosure starts rose by a modest 2.6% in October, but foreclosure activity remains extremely limited despite the expiration of federal moratoria, according to a report by mortgage data company Black Knight.
The national delinquency rate on first-lien mortgages dropped to 3.74% in October, within a half percentage point of the pre-pandemic low set in January 2020, Black Knight said in its October 2021 Mortgage Monitor report.
Serious delinquencies fell by 127,000, or more than 10%, as the first wave of forbearance entrants returned to making mortgage payments, Black Knight said.
Meanwhile, foreclosure starts increased by just 100, or 2.6%, over September’s numbers. October’s 4,000 starts were almost 15% lower than the same period a year ago, the company said.
The number of loans in active foreclosure ticked up by 3,000, but remained near an all-time low in October, for a total of just 138,000, Black Knight said.
At 0.26%, the national foreclosure rate remains near the lowest it’s been since Black Knight began tracking the metric in January 2020, the company said.
Further improvement is expected in coming weeks as most borrowers exiting forbearance plans are still working through loss mitigation options with their lenders, Black Knight said. There are still nearly 700,000 more seriously delinquent mortgages (including those in active forbearance plans) than there were prior to the pandemic
New delinquencies in October rose 9% from the month prior, trending closer to pre-pandemic levels, but remained 6% below the same month in 2019.
Overall, each month in 2021 has now trended at or below 2019 levels, with 2021 still slated to see the lowest inflow of new delinquencies in more than 15 years, Black Knight said.
New serious delinquencies in October were 4% below 2019 levels, but overall volumes for the year are up 12% from 2019 as loans remain delinquent longer due, in part, to forbearance.
The $9.4B in homeowner assistance funds allocated under the American Rescue Plan Act could cover 36% of past-due PITI payments, assuming 100% of funds were directed at paying down forborne mortgage debt, Black Knight said.
In producing the Mortgage Monitor, Black Knight’s Data & Analytics division aggregates, analyzes and reports on the most recently available data from the company’s mortgage and housing related data assets covering 99.9% of the U.S. population.