Foreclosure starts rose in June for the second month in a row but Black Knight Financial Services, in its "first look" at the month's mortgage performance data, says the increase did not keep starts in the second quarter of 2016 from being at the lowest level in over 16 years. There were 69,300 foreclosures initiated during the month, an 11.59 percent increase over the previous month. This was a decrease of 11.27 percent year-over-year.
The number of mortgages that were 30 or more days past due but not in foreclosure also blipped up slightly, an increase that Black Knight called seasonal. There were 2.18 million such loans, up 25,000 month-over-month, a rate of 4.31 of all active mortgages, 1.33 percent higher than in May. Year-over-year the number of delinquencies was down by 237,000 and the rate decreased by 10.03 percent.
Seriously delinquent loans, those 90 or more days past due but not in foreclosure, continued to trend down, dropping 27,000 from May to 692,000 loans. There were 161,000 fewer seriously delinquent loans than a year earlier.
Completed foreclosures, expressed as a percentage of loans more than 90 days past due, rose by 13.54 percent to a rate of 2.31 percent. This is an increase of 20.65 percent year-over-year.
The foreclosure inventory, properties in process of foreclosure, also shrank by 16,000 units in a month and was 231,000 units smaller than in June 2015. There were 558,000 properties in the foreclosure inventory at the end of the reporting period.
At the end of June there were 2.74 mortgage loans in some stage of delinquency or foreclosure, down 9,000 from May and a reduction of nearly a half million over the last 12 months. Non-current rates were up from six months earlier in three states, Wyoming, North Dakota, and Alaska, as those energy producing areas began to feel the impact of problems in the oil and gas markets.
The highest levels of non-current loans continue to be found in Mississippi, Louisiana, and New Jersey. The rates in those states are 11.19 percent, 9.18 percent, and 8.81 percent respectively. Alabama and Maine rounded out the top five.
Black Knight also noted that prepayment speeds (SMM) which are historically a good indicator of refinance activity, rose to a 12 month high of 1.44 percent. This was an increase from May of 10.30 percent, mirroring an overall rise in refinance activity corresponding to historically low interest rates.
The company will release more detailed June performance data in its monthly Mortgage Monitor. That report is scheduled to be released on August 1.