The federal foreclosure moratoria expired at the end of July and, with some 1.45 million borrowers seriously delinquent on their mortgages but not in foreclosure, Black Knight says, "potential foreclosure activity in the coming months warrants close observation." The majority of those seriously delinquent mortgages, however, are still in active forbearance plans.
The company, in its "first look" at July's mortgage performance data, notes that, aside from this concern, overall mortgage delinquencies are down by nearly half since May 2020 and have improved in 12 of the last 14 months.
The national delinquency rate declined by 114,000 loans or 5.22 percent in July and is now at 4.14 percent of all mortgage loans. A total of 2.206 million loans are 30 or more days past due, down by 1.486 million year-over-year.
As noted, seriously delinquent loans are still elevated, there are about 1 million more than before the pandemic, but their numbers dropped by just over 100,000 in July and are nearly 1.5 million fewer than in July 2020. In addition, there are 140,000 loans in foreclosure and that number is also down by 5,000 since June and 50,000 year-over-year. Foreclosure action was started on 4,200 loans during the month.
Black Knight's weekly roundup of forbearance activity shows a slight increase in the number of loans in active plans, a net increase of 11,000. That change was driven entirely by a 12,000 rise in plans among Portfolio/PLS loans. Loans serviced for the GSEs Fannie Mae and Freddie Mac declined by 1,000 while the number of FHA and VA forborne loans were unchanged.
At the end of the reporting period on August 17, the company estimates that 1.75 million borrowers remain in forbearance, 3.3 percent of active mortgage loans. The weeks relatively muted activity leaves 1.9 percent of GSE, 5.8 percent of FHA/VA, and 4.0 percent of portfolio/PLS loans in the program. The overall volume has declined 110,000 or 5.9 percent over the last month. The rate of improvement has slowed slightly in recent weeks.
Black Knight says some 200,000 plans are slated for review before the end of August. Approximately one-third will reach their final expiration unless there is a further extension of the forbearance program.
The company says that prepayment activity has slowed, down by 11 percent compared to June and 26 percent from the rate in July 2020. The single month mortality rate in July was 2.04 percent.
The company will present some of this July data in greater detail in the next Mortgage Monitor. It will be published on September 8.