Black Knight Financial Services released its "First Look" at its July loan level performance data which continues to show a decline in most measures of mortgage distress.  Delinquencies, foreclosure starts, and the foreclosure inventory all declined for the month although actual foreclosures did increase.  The monthly prepayment rate also fell; this metric is closely tied to the incidence of refinancing.

The national delinquency rate, loans 30 or more days past due but not in foreclosure, stood at 4.71 percent in July, a 2.22 percent decline from June and down 16.46 percent year-over-year.  The number of delinquent mortgages numbered 2.39 million, down 55,000 from the previous month and 460,000 from July 2014.

Of those delinquencies 886,000 were considered serious, that is 90 or more days past due but not in foreclosure.  This is down 9,000 month-over-month and is a decline of a quarter million loans on an annual basis.

There were 75,400 foreclosure starts during the month, reductions of 4.56 percent and 16.87 percent from the two earlier periods.  Even with this number foreclosure starts the number of homes in the process of foreclosure declined by 28,000 to 711,000 in July and the foreclosure inventory has shrunk by 224,000 homes over the previous year. Completed foreclosures increased by 2.15 percent and 5.67 percent, representing 1.95 percent of seriously delinquent mortgages. 

The monthly prepayment rate was 1.26 percent of mortgaged homes, a decline of 9.41 percent from June.  The rate was 20.42 percent higher than the previous July.

Mississippi has the highest percentage of distressed loans at 12.75 percent, followed by New Jersey, Louisiana, Maine, and New York.  All five states have seen substantial declines - New Jersey has dropped over 18 percent - in the last 12 months.

Black Knight provides a more in-depth review its data in its monthly Mortgage Monitor report.  The next edition of this report will be released by September 8.