September Delinquencies Dropped 41% YOY, Lowest Level In 18 Months

The national delinquency rate dropped below 4% for the first time in 18 months in September, according to Black Knight’s September 2021 “first look” report.

It is a 2.3% drop from August and 41.3% lower year-over-year. And those numbers might have been even better if not for the impact on delinquencies a result of hurricanes in Louisiana, many in FEMA-declared disaster areas.

Mississippi, West Virginia, Oklahoma, and Alabama ranked just below Louisiana for the highest percentages of non-current loans.

Foreclosure starts also fell in September, coming down 45% from August. August saw spikes in foreclosure starts in the days following the Supreme Court’s decision to end the national moratorium. However, those increases were from historic lows, meaning the raw numbers remained below historically normal levels.

September’s dip suggests the post-moratorium fever cooled by the middle of the month, launching rates back down to the record lows seen this year.

With 3,900 foreclosure starts, September also had the third-lowest monthly total on record and was within 6% of April 2021’s record low of 3,700.

The number of active foreclosures also fell to an all-time low. The number of homes in foreclosure pre-sale was 0.26%, down 4.60% month-over-month and 24.92% year-over-year.

“With nearly 400,000 mortgage holders having exited forbearance plans in just the first two weeks of October alone, it will be essential to track foreclosure metrics closely in the coming months,” the report reads. Approximately 1.2 million homeowners are still 90 or more days overdue on their mortgage payments, including those in active forbearance plans.

Black Knight’s September month-end mortgage performance data comes from its loan-level database, representing most of the national mortgage market.