Mortgage delinquencies decline sharply in January

by Kim Burgess23 Feb 2018

Mortgage delinquencies declined dramatically in January, while foreclosure starts rose due to calendar-driven procedural issues, according to Black Knight’s latest First Look report. Recent hurricanes continue to impact homeowners, though their impact has diminished.

The reduction in hurricane-related delinquencies, coupled with quirks in the December calendar, resulted in a 210,000-loan drop in the number of past-due mortgages. With 2017 ending on a Sunday, the delinquency rate bounced back in January as payments were processed after the holiday weekend. 

Despite an 8.6 percent monthly decline, delinquencies remain 1.3 percent above last year’s levels.

Roughly 145,000 loans are delinquent as a result of Hurricanes Harvey and Irma, 132,000 of which are 90 or more days past due. An early look at January data on the mortgage market in Puerto Rico shows an additional 57,000 loans still delinquent as a result of Hurricane Maria, with 49,000 seriously delinquent.

Active foreclosures predating the hurricanes, but put on hold after the storms, have begun to revert back to that status as post-hurricane foreclosure moratoria become set to expire. As a result, foreclosure starts rose sharply in January, hitting a 12-month high at 62,300 for the month. The population of loans in active foreclosure rose 6,000 month-over-month, marking only the second monthly rise in more than five years.

Southern states are faring the worst overall. Black Knight reported that the top five states by non-current percentage – foreclosures and delinquencies as a percentage of active loans – are Mississippi (10.95%), Louisiana (9.34%), Florida (8.34%), Alabama (7.47%) and West Virginia (7.17%).

On the other end of the range are Idaho (2.59%), Washington (2.50%), Oregon (2.43%), North Dakota (2.36%) and Colorado (2.05%).

Related stories:
November delinquency data reflect waning hurricane impact
Delinquency rate increased at the end of 2017