Mortgage servicing professionals are looking at the lowest foreclosure numbers in nearly a decade. Foreclosure starts from November 2016 have fallen along with pre-payment activity remaining strong, according to the First Look report curated by Black Knight Financial Services, Inc.
Specifically, the report found that the delinquency rate rose by 2.5 percent, a relatively mild seasonal increase by historical standards, as the annual improvement in mortgage delinquency rates is beginning to slow as market “normalizes.” Black Knight reports that the total U.S. loan delinquency rate for loans 30 or more days past due but not in foreclosure hit 4.46 percent with a month-over-month increase of 2.55 percent. Despite the slight month to month uptick, the delinquency rate still fell 9.43 percent from the year prior.
Black Knight also adds that number of loans in active foreclosure dropped below 500,000 for the first time in nearly 10 years, landing at 498,000 total properties in foreclosure pre-sale inventory. This was a marginal month-over-month decrease of 6,000, but a large drop of 200,000 from November 2015. This change brought the total U.S. foreclosure pre-sale inventory rate to 0.98 percent, 1.35 percent lower that October’s rate and 28.88 percent lower than the year before.
According to the report, pre-payment activity also remains strong, for now, as applications made prior to the rise in interest rates continue to close. Currently the monthly prepayment rate (SMM) sits at 1.43 percent, a slight decrease of 4.20 percent from October, but a year over year whopping increase of 56.07 percent.
The First Look also notes that the number of properties that are 30 or more days past due or in foreclosure rose by 55,000 from October to 2,761,000 in November, in part because of the increase in properties that are 30 or more days past due, but not in foreclosure (61,000 from October) and properties that are 90 or more days past due, but not in foreclosure (5,000). The total number of properties that are 30 or more days past due or in foreclosure did decline from November 2015 with a year-over-year change of 428,000 properties.