After a worrisome spike in January, foreclosure activity settled back down in February, with some metrics reaching multi-year lows.  Black Knight Financial Services said that delinquency rates, which had jumped above 5 percent in January for the first time in nearly a year, fell 12.57 percent in February to 4.45 percent of outstanding mortgages.  It was the lowest rate since April 2007 and 15.93 percent below the rate in February 2015.

Delinquencies are defined as loans that are 30 or more days past due but not in foreclosure. In terms of numbers there are 2.52 million loans nationwide meeting that definition in February, down by 323,000 since January and 419,000 on an annual basis.  Delinquencies had jumped by 167,000 in January. Of the February delinquencies 772,000 were considered seriously delinquent, that is 90 or more days past due but not in foreclosure, a decline of 59,000 for the month and about a quarter million from the previous February. 

There was a substantial jump in loans beginning the process of foreclosure.  Black Knight said this was largely the result of repeat foreclosure starts in New York, New Jersey, and Massachusetts.  Eighty-four thousand loans started the process of foreclosure nationwide, up 17.25 percent month-over-month and 9.20 percent for the year.  Despite this increase the number of properties in foreclosure, the foreclosure inventory, fell by 4,000 for the month to 655,000, a decline of 211,000 from the same point in 2015.

The total non-current inventory nationwide slipped below 3 million for the first time in over eight years to a total of 2.91 million.  This was a decrease of 327,000 in a single month, more than half of the 630,000 loan improvement for the entire year.  

Mississippi continues to lead the nation in the percentage of outstanding mortgages that are non-current, 11.43 percent.  Even that number represents a decline of nearly 15 percent on an annual basis.  Mississippi is followed by New Jersey, Louisiana, New York and Maine, all with rates between 8 and 10 percent.

In other news, the prepayment rate, historically a good indicator of refinance activity was 0.89 percent.  This was up 10 percent from January's 24-month low but was still 22 percent below the rate of prepayments in February 2015.

Black Knight typically releases foreclosure and pre-payment data in advance of its monthly Mortgage Monitor report which takes a more in-depth look at some aspects of loan performance.  The Monitor will be released during the first week of April.