The national delinquency rate has fallen below 4.0 percent for the first time since COVID-19 started messing up the world. Black Knight, in its "first look" at September's mortgage performance data, says the rate in September, 3.91 percent, represents a reduction of more than 41 percent from September of 2020 and is 2.25 percent below the August level. Delinquencies have moved lower in 14 of the last 17 months.

There were 2.068 million loans that were 30 or more days past due in September, not including loans in foreclosure. This is down 54,000 from the prior month and 1.474 million fewer past due loans than the prior September.

Black Knight says there would have been fewer delinquencies in September if not for Hurricane Ida which hit Louisiana especially hard. There was an increase of 7,800 past due mortgages in those areas with a FEMA-declared disaster and 11,000 in the state overall.

Serious delinquencies, loans 90 or more days past due but not in foreclosure, dropped by 106,000 in a single month to 1.233 million. This is 1.09 million fewer serious delinquencies than a year earlier. The number of loans in foreclosure also fell. The 135,000 loan foreclosure inventory is 7,000 loans lower than in August and is down 46,000 year-over-year.

The company points out that foreclosure starts fell sharply during the month. The federal foreclosure moratorium put in place in response to the pandemic expired on July 31 and starts spiked in August. However, the 3,900 starts in September was down 45 percent and was 13.3 percent lower year-over-year. It is the third lowest number of starts on record.

Louisiana posted the highest rate of non-current mortgages during the month at 8.98 percent. Mississippi followed at 7.65 percent followed by West Virginia, Oklahoma, and Alabama, all with rates between 5.5 and 5.8 percent.

Black Knight also reports that there was a typical mid-month lull in the ongoing decline of loans in forbearance. The number of active plans fell by 7,300 during the week ended October 19, just a 0.6 percent reduction in the total.

The number of FHA and VA loans declined by 10,500 and a net of 2,800 GSE (Fannie Mae and Freddie Mac) loans exited from the program. The number of portfolio and private label securities increased by 6,000. As of October 19, 1.24 million borrowers remain in plans, representing 2.3 percent of all active mortgages, including 1.3 percent of GSE, 3.9 percent of FHA/VA and 3.0 percent of portfolio held and privately securitized loans.

The company notes that nearly 400,000 mortgage holders exited forbearance plans in just the first two weeks of October and, of the 1.2 million homeowners who are 90 or more days past due many are still in active plans. It will be essential to track foreclosure metrics closely in the coming months.