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ICE Notes Spike In Delinquencies While Foreclosures Remain Low

Jul 22, 2024
Delinquencies in closed-end loans increased in last year’s third quarter, according to results from the American Bankers Association’s (ABA) Consumer Credit Delinquency Bulletin
Associate Editor

Sunday month-ends typically lead to a sharp, albeit temporary, spike in delinquent mortgages

Intercontinental Exchange, Inc (NYSE: ICE) took its "first look" at June 2024 month-end mortgage performance statistics that represents the national mortgage market. After a near-record low in May 2024 and with June ending on a Sunday, the national delinquency rate jumped up 14.5% (45 basis points) to 3.49% — the second highest level in 18 months. 

However, researchers note that when the month ends on Sunday, it often leads to sharp, albeit temporary, spike in delinquent mortgages. The reason being, payments made on the last day of a given month are not processed until the following month.

In all, June saw a near 20% increase in the number of borrowers a single payment past due — the highest inflow since May 2020 — while 60-day delinquencies rose 11.8% to a five-month high. Serious delinquencies (90+ days past due) in June 2024 were up 5.1% from the previous month, but still down 8.5% from last year and 10.1% below pre-pandemic levels.

Foreclosure starts declined 6.2% in June, pushing active foreclosure inventory to its lowest point since the end of COVID-era moratoriums, now 34% below pre-pandemic levels. Foreclosure sales also reached its lowest level since February 2022, completing 5,300 sales nationally in June. That’s a 14.9% drop in sales from the previous month and still well below pre-pandemic norms.

Additionally, ICE’s first look found prepayments eased down 7.6% from May, breaking a six-month streak of increasing prepay activity as the seasonal peak of home sales nears and affordability constraints persist. 

The top five states had little change in the percentage of residents with non-current payments compared to last year. Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. Leading the way, Alaska (-1.8%), Montana (-.28%), New York, (+0.37%), Hawaii, (+1.39%), and Vermont (+2.8%).

The bottom five states by year-over-year change in non-current percentage were South Dakota (+9.27%), Louisiana (+18.2%), Arizona (+17.48%), Tennessee (+16.43%), and Arkansas (+15.18%).

About the author
Associate Editor
Katie Jensen is a mortgage news reporter at NMP.
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