“Looking at IRS filing statistics, we see that nearly one in five Americans file their returns within the first two weeks of tax season, and over 40% had completed their taxes by the first week in March,” said Ben Graboske, data & analytics executive vice president at Black Knight. “Unsurprisingly, incentive played a big role in this timing; not only were Americans who filed early more likely to receive a refund than those filing later, but they also received larger refunds on average.”
For Black Knight’s December Mortgage Monitor, its data & analytics division examined IRS tax filing data for the upcoming tax season. It found a rise in mortgage cures – “delinquent borrowers who bring themselves back to current status” – in February and March. This is an indicator that many use their tax refunds to pay past-due mortgage payments in those months – almost 300,000 borrowers in recent years.
“We see this increase in cures across the delinquency and foreclosure spectrum, but it is most pronounced in the early and moderate stages of delinquency,” Graboske said. “This makes sense, in that a tax refund may be sufficient to pay a few months of past-due mortgage payments, but is likely not enough to bring a homeowner out of severe delinquency.”
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One in five Americans file their income tax returns within the first two weeks of tax season, and nearly 300,000 borrowers use their tax refunds to make mortgage payments, according to new data from Black Knight Financial Services.