Serious delinquencies continued to improve in October, buoyed by widespread foreclosure moratoriums and record-low interest rates pushing prepayment activity higher.
A representative from Black Knight said in an email to MPA that its monthly mortgage loan performance report contained “pretty much good news all around this month, though mostly of the slow-and-steady-wins-the-race variety.”
New data from the report showed that the number of seriously delinquent mortgages – loans 90 or more days past due – declined by 64,000 month over month to 2,259,000 in October. However, volumes remained more than five times (+1.8 million) higher than pre-pandemic levels.
The national delinquency rate fell to its lowest level since March, down to 6.44% last month. Month-over-month, there were approximately 105,000 fewer past-due mortgages in October.
Read more: Delinquencies could remain elevated for years
Widespread moratoriums also continued to keep foreclosure activity at historic lows. October foreclosure starts plunged 90% year-over-year to 4,700, while active foreclosure inventory hit yet another record low at 178,000.
“Record-low interest rates again pushed prepayment activity higher, with October's prepayment rate of 3.17% setting the highest single-month mark in more than 16 years,” Black Knight said in the report.
Despite five straight months of improvement, there were almost twice as many delinquencies as there were at the beginning of the year. In total, more than 3.4 million homeowners are behind their mortgage payment.
Black Knight noted that its delinquency figures count all homeowners who have missed payments, “whether they are in forbearance or not. That said, borrowers in forbearance should not have missed payments reported to the credit bureau by their servicers.”