The delinquency rate nationwide dropped to 2.80% in April, as overall delinquencies fell almost 40% YOY, according to Black Knight’s “first look” at its April 2022 month-end mortgage performance stats.
The numbers reflect the mortgage market’s continued recovery from pandemic impacts.
Prepayment activity dropped 19.1% from March and is down 61.8% YOY due to rapidly increasing interest rates. Rates averaged 5.25% last week.
The number of borrowers who are a single payment overdue rose 7.9% month-over-month, which Black Knight says is typical of the season.
That increase was offset by improvements among more seriously delinquent borrowers.
The volume of borrowers three or more months past due fell by 8% from the month prior.
Serious delinquencies are down between 6% and 12% in the past 14 months. But volumes are still 55% above pre-pandemic levels.
Foreclosure starts have fallen almost 12% from March and remain significantly below pre-pandemic levels. Active foreclosures ticked up, however.
Forbearances have seen improvements in the last month, in line with Black Knight’s delinquency numbers. The number of loans in forbearance fell 11% in April from 1.05% of servicers’ portfolio volume to 0.94%, according to the Mortgage Bankers Association’s (MBA) Loan Monitoring Survey.
“With the number of borrowers in forbearance decreasing to less than half a million, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis.
“Servicers are expected to continue making small incremental inroads to the remaining loans in forbearance.”
The share of borrowers who are current on their payments rose to the highest levels this year despite current challenges like inflation.
Walsh noted that indicators such as inflation or the stock market don’t always hold water when looking at loan performance.
“The best indicator of loan performance is overall national employment. The U.S. unemployment rate is still below 4 percent, leaving borrowers in a good position to make their monthly mortgage payments,” Walsh said.