Black Knight has pointed out in the past that there is a temporary uptick in early mortgage delinquencies when a month ends on a Sunday, leaving less time for servicers to process last minute payments. May did not end on a Sunday this year, however the last day of the month was Memorial Day, leaving even less time to post those checks. The last time there was such a month-end double whammy in May was in 2004, and the national delinquency rate jumped 15 percent.

Not this year. Black Knight, in its "first look" at May performance data, says that this time the convergence of negative forces pushed the rate up only 1.5 percent to 4.73 percent. There were 2.51 million loans that were 30 or more days past due but not in foreclosure at the end of May, 11,000 more than in April. Delinquencies were down by 1.61 million or 30 percent compared to May of 2020, amid the pandemic-related shutdowns.

Serious delinquencies, loans that are 90 or more days past due but not in foreclosure, declined for the ninth consecutive month, dropping by 99,000 loans to 1.67 million. Those delinquencies are up by just over a million from a year earlier and represent a fourfold increase (+1.3 million) in that category since the onset of the COVID-19 virus.

Both foreclosure starts and the number of loans in the process of foreclosure remain low due to the ongoing foreclosure moratoria. Starts numbered 3,800 during the month and the foreclosure inventory number contained 148,000 or 0.28 percent of active loans. The inventory is down 5,000 from April and 52,000 lower than a year ago.

With mortgage rates trending higher, the single month mortality or prepayment rate is down from earlier levels. The rate in May was 2.15 percent, the lowest in a year, and 17 percent lower than the prior month.  

Black Knight will provide more information about May loan performance in its next Mortgage Monitor. It will be published on July 7.