Mortgage delinquencies fall to 12-year low, but effects of Florence loom
The mortgage delinquency rate dropped to its lowest level in over 12 years, but servicers should expect an increase following the impact of Hurricane Florence, according to Black Knight.
The mortgage delinquency rate was 3.52% in August, down from 3.93% a year ago and from 3.61% in July.
However, these numbers will likely be on the rise in the coming months following the fallout from Hurricane Florence. Florence's evacuation area accounted for 391,000 homeowners with mortgages, of those, an estimated 283,000 were in the FEMA-declared disaster areas.
"Because of when Florence made landfall, there's no sign of the storm's impact on mortgage performance just yet. But, as anyone watching the news is aware, this is a situation that continues to develop," Ben Graboske, executive vice president of Black Knight's data and analytics division, said in a statement to NMN.
There are now 1.82 million properties with a delinquent mortgage, down 185,000 from a year ago and 43,000 from July.
The number of properties with a mortgage late by 90 or more days but not yet in foreclosure hit its lowest post-recession count of 510,000 in August, down 47,000 properties from a year ago and 18,000 from July.
There were 48,000 foreclosure starts in August, down 12.25% since last year and a slight month-over-month drop of 0.62%.
"If we see a comparable impact to what followed last year's hurricanes, we could be looking at thousands of homeowners falling past due on their mortgages in the coming months. It's important to remember that delinquency rates in Texas, Florida and Puerto Rico are still on the mend, despite those storms making landfall more than a year ago," Graboske continued.