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Mortgage Prepayments Fell, Delinquencies Rose In November

David Krechevsky
Dec 22, 2022
Black Knight First Look November 2022

Black Knight 'First Look' finds signs that more homeowners are struggling to make payments.

KEY TAKEAWAYS
  • Prepayment activity in November dropped 15.6% to the lowest rate on record since 2000.
  • National delinquency rate rose in November to 3.01%.
  • Foreclosure starts rose 19% on the heels of October’s increase.

Black Knight’s First Look at mortgage performance in November isn’t pretty, with signs that a growing number of homeowners are struggling with their mortgage payments.

Among the findings of Black Knight’s First Look at its monthly Mortgage Monitor, which is derived from its loan-level database representing the majority of the national mortgage market:

  • Prepayment activity in November dropped 15.6% to a single month mortality (SMM) rate of 0.4% — once again marking the lowest rate on record since before 2000, when Black Knight started reporting the metric.
  • The national delinquency rate, meanwhile, rose another 3.5% in November to 3.01%, up 10 basis points since October. The increase was  driven by a 31,000 (+3.9%) increase in 30-day delinquencies, and a 25,000 (+11%) increase in 60-day delinquencies, and
  • Foreclosure starts rose again (+19%) on the heels of October’s increase, but the month’s 23,400 starts are still below the recent high seen in June and remain 30% below pre-pandemic levels.

There were more indications that foreclosures are on the rise, though not to pre-pandemic levels. Foreclosure proceedings were started on 4.3% of serious delinquencies in November, up 7 basis points from October but still 44% less than the rate seen in the years before the pandemic.

In addition, the active foreclosure inventory rose 5.3%, though 2022 volumes remain subdued after the record lows of 2021 due to widespread moratoriums and forbearance protections.

By state, Mississippi had the worst percentage of non-current mortgages at 6.7%, followed by Louisiana at 6.08%, Oklahoma at 5.03%, Alabama at 4.7% and West Virginia at 4.66%.

Oregon, on the other hand, had the lowest percentage of non-current mortgages at 2.06%, followed by Colorado at 1.98%, California at 1.9%, Idaho at 1.79% and Washington at 1.69%.

The look at non-current mortgages combines foreclosures and delinquencies as a percentage of activer loans in the state, Black Knight said. 

Black Knight also noted that the delinquency rate in Florida rose another 18 basis points in November to 3.6% as the impact of Hurricane Ian on homeowners’ ability to make mortgage payments continues.

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