Mortgage Delinquencies Rise in March, First Time Since 2000

Mish

March is typically a very strong month performance-wise, but not this year due to Covid-19.

Blank Knight reports "March Sees First Ever Mortgage Delinquency Increase in Early Sign of COVID-19 Impact "

Key Points 

  • In what’s typically the strongest month of the year for mortgage performance, delinquencies rose by 3.33%, the first March increase since the turn of the century, an early sign of COVID-19’s impact on the market
  • Both the national foreclosure and 90-day delinquency rates set new record lows in March, a lingering reminder of the strength of the mortgage market heading into the pandemic
  • At just 27,600 for the month, foreclosure starts also fell to their lowest level on record, as COVID-19-related moratoriums began to impact foreclosure inflows
  • Prepayment activity jumped by nearly 40% in March, driven by record-low 30-year mortgage rates
  • Note: For the purposes of this report going forward, the millions of homeowners who have since entered into forbearance will be counted as past due, but should not be reported as such to the credit bureaus by their servicers

Black Knight Mortgage Stats 

Black Knight Mortgage Stats 2020-04-23

Year-over-year trends on delinquencies and foreclosures has been impressive. 

That will end in April or May.

Mike "Mish" Shedlock

Comments (20)
No. 1-7
tokidoki
tokidoki

Dow 120K?

Zardoz
Zardoz

Corporate Governed Feudalism, here we come!

MATHGAME
MATHGAME

Nobody should lose their home or be evicted from their apartment because of job impact of COVID-19 shutdown. Nor should any lender be able to demand a "balloon payment" after a period of "forgiveness".

The lockdown was required by the governmental powers that be and so the financial powers that be are just going to have to "share the pain" and extend the terms of their loans as though the period of time the lockdowns are in force never existed.

Tony Bennett
Tony Bennett

"In what’s typically the strongest month of the year for mortgage performance, delinquencies rose by 3.33%"

...

To add some flesh

Black Knight:

"March typically marks the strongest month in terms of mortgage performance, with tax refunds and bonus payouts helping homeowners catch up on past-due mortgage payments On average, over the past 20 years, mortgage delinquencies have declined by 10% month over-month in March – more than 3X the average improvement of any other month."

And early March saw decades low in mortgage interest rates.

Ted R
Ted R

So it is going to be 2008 al over again. I read a story last weekend that in anticipation of rising mortgage delinquencies JPMorgan Chase has raised the minimum credit score to 700 to qualify for a mortgage. If true this will certainly slow down the mortgage and housing business.

Tony Bennett
Tony Bennett

March new home sales out today.

SAAR

627K

priors with downward revisions

January ... 800K --> 777K
February ... 765K --> 741K

Median price went from $345,900 --> $321,400

Average price went from $403,800 --> $375,300


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