Mortgage delinquencies have largest monthly spike in 10 years
After falling to its lowest level in over 12 years, servicers expected September's surge in delinquencies following the damage of Hurricane Florence, according to Black Knight.
While the delinquencies had a 9.77% drop year-over-year, they grew 13.22% from the month prior — the largest month-to-month rise since November 2008. September, the peak month of hurricane season, perennially has delinquency growth. In fact, 16 of the past 19 Septembers saw increases.
"This past month, multiple mortgage performance-related factors combined to create a 'perfect storm' in terms of impact to the national delinquency rate," Ben Graboske, executive vice president of Black Knight's data and analytics division, said in a statement to NMN.
"To begin with, September delinquency increases are extremely common, as are increases in months ending on Sundays. This year, we had both. On top of that — though it accounted for less than 5% of the overall increase — the impact of Hurricane Florence on mortgage performance is just beginning to be felt. All of those forces in conjunction resulted in the largest month-over-month increase in the national delinquency rate in nearly a decade."
Foreclosure starts hit a low of nearly 18 years, falling to 40,000 in September — decreases of 11.5% year-over-year and 15.07% month-over-month. Moreover, total active foreclosures and the foreclosure rate both dropped below prerecession averages for the first time since the housing crisis.
"September's drop in foreclosure starts is the continuation of a long-term trend. Indeed, starts have seen average declines of about 16% year-over-year for the past 12 months," said Graboske. "Together, continued recovery from the financial crisis, pristine performance of post-recession originations and improved loss mitigation efforts are resulting in strong performance in the market and low levels of default activity."