The mortgage market has experienced four straight years of significant, sustained improvement in delinquent inventories as they are only 1.5 times their pre-crisis average at yearend 2013.
Data from Black Knight Financial Services showed that serious delinquencies—payments not made in 90 or more days—are down 14% in judicial states compared to 21% in nonjudicial states.
Additionally, the end of December 2013 represents the second consecutive year where foreclosure inventory nationwide continued to decline substantially, as it fell 30%, BKFS revealed.
For example, Massachusetts has seen its foreclosure pipeline ratio drop 49% since June 2013, while New York and New Jersey have come down 39% and 37%, respectively.
Meanwhile, California's—which enacted its Homeowner Bill of Rights at the beginning of 2013—foreclosure inventory increased by 36% during this six-month time period.
Overall, foreclosure pipelines in judicial states remains three times larger than nonjudicial ones, the Jacksonville, Fla.-based analytic provider says.
With 105,000, foreclosure starts ended 2013 at the lowest level since April 2007.
"In many ways, 2013 marked an abatement to crisis conditions in the U.S. mortgage market," says Herb Blecher, senior vice president of Black Knight Financial Services' Data & Analytics division. "New problem loan rates improved in both judicial and nonjudicial foreclosure states. In addition, due to stricter underwriting, 2013 originations have proven to be the best performing loans on record."
However, higher interest rates and the winter season pushed monthly originations to the lowest levels in five years as the refinancing wave the industry has observed for the last several years appears to have ended.
"With continued tapering anticipated by the market, opportunities for new originations will likely come from looser underwriting and/or home equity lending (which has shown a sizable increase in volume since last year)," Blecher added.