But there are some mitigating factors says Black Knight
September brought the largest single-month rise in mortgage delinquencies since November 2008 according to a new report.
Black Knight Inc. says that the 13.2% increase (9.77% year-over-year) was exacerbated by Hurricane Florence-related delinquencies, which spiked 38% month-over-month, with 6,000 borrowers already missing a payment as a direct result of the storm.
Nationally, 240,000 homes joined those 30 or more days past due but not in foreclosure, taking the total to 2,049,000.
However, the firm says that there are some elements of the month that generally contribute to rising delinquencies.
First, Septembers. In 16 of the last 19 Septembers the delinquency rate has increased, with an average 5.2% rise.
Second, the month ended on a Sunday, meaning there were fewer days to process payments. Black Knight says that there is always a rise in delinquencies in months that end on Sundays, with a reversal (not completely) in the following month.
The impact of Hurricane Florence completed the ‘triple-threat’ for mortgage performance.
There is some good news
On a positive note, September saw a double-digit drop in foreclosure starts compared to August. The 15% (11% year-over-year) drop took foreclosure starts to a near 18-year low of just 40,000 for the month.
The number of loans in active foreclosure (and the foreclosure rate) has now dropped below pre-recession averages for the first time since the crisis.
The monthly prepayment rate was down around 25% month-over-month and year-over-year though, amid rising interest rates and home prices.
