The first serious mortgage related impact from last fall's hurricanes started to hit home in July. Foreclosure starts rose 11 percent from June, with the greatest change 19 percent, in storm affected parts of Texas. Black Knight said, in its "first look" at July loan performance data, that the increase brought starts to 48,300, the highest total in three months. The increase came off of a 17-year low for starts in June. The rate of starts is still 9.3 percent lower than in July 2017.
On the other hand, hurricane-related cures pushed delinquencies to a 12 year low. The number of loans that were 30 or more days past due but not in foreclosure dropped by 64,000 since June to 1.861 million, a year-over-year decline of 125,000. This brought the delinquency rate down by 3.35 percent from the June rate and 7.5 percent on an annual basis to a national rate of 3.61%. Serious delinquencies, those 90 or more days in arrears but not in foreclosure fell to 528,000, 20,000 fewer than in June and 27,000 fewer than a year earlier.
The foreclosure inventory bumped up slightly. Black Knight said this was the result of the increased number of foreclosure starts and a near 5 percent decrease in the foreclosure completion rate. There were 293,000 homes in the process of foreclosure at the end of July, 105,000 fewer than a year earlier, but up 2,000 from June. The total represents 0.57 percent of all mortgaged homes.
The monthly prepayment rate, an indicator of refinancing, continues to decline and is now at a rate of 0.90 percent. This is 5.33 percent lower than in June and down 11.4 percent when compared to July 2017.
A total of 2.154 million homes nationwide have mortgages that are more than 30 days past due, including those in foreclosure. This is nearly a quarter million fewer than a year ago.
Mississippi, Louisiana, Alabama, West Virginia, and Indiana continue to have the highest rate of non-current mortgages in the country. The numbers range from 9.61 percent in Mississippi to 5.85 percent in Indiana. Delinquencies in both Florida and Texas have improved substantially from their post-hurricane levels, and they top the list of those with the most improved non-current rate. Florida's rate is down 37.2 percent and Texas 23.77 percent in the last six months to rates of 5.24 and 5.10 respectively. Florida does remain near the top of states in terms of serious delinquencies with a rate of 1.79 percent, behind Mississippi, Alabama, and Florida.
Black Knight will provide a more in-depth review of some of its July data in its monthly Mortgage Monitor report. It will be published by Sept. 10, 2018.