Mortgage

Foreclosures hit a brand new all-time low in November

In November, mortgage defaults fell to a low point in the coronavirus era, while foreclosures hit their lowest ever, according to Black Knight.

Loans that were at least 30 days late or foreclosed as early as late November fell from 3.62 million in October to nearly 3.56 million. This is the sixth month in a row with declines and is thus well above the previous year's level of 2.12 million.

The crime rate – excluding loans in the event of foreclosure – fell from 6.44% in a month-on-month comparison to 6.33% and was thus above the previous year's rate of 3.53%.

Fatal borrowers – those 90 days or more delayed but not yet foreclosed – also fell from 2.26 million to 2.19 million, but quintupled the 439,000 as of November 2019.

At the state level, Mississippi and Louisiana had the highest proportions of long-term mortgages for the second straight month. They recorded rates of 11.11% and 10.74%, respectively, followed by Hawaii at 9.45%. Idaho led again with an improved long-term share of 3.45%, followed by 4.06% in Washington and 4.19% in Colorado.

The three countries with the highest crime rates also had the worst serious crime rates. Mississippi's 6.58% were the highest in the nation, closely followed by Louisiana's 6.51% and 5.8% in Hawaii.

Around 4,400 loans went into foreclosure in November, along with 176,000 mortgages in active foreclosure. These fell from 4,700 and 178,000 in October and 33,500 and 248,000 the year before. November totals are the lowest since Black Knight's persecution began in 2000. These should remain with man-made nadirs through at least the end of January, and could continue as long as CARES protection extends.

Prepayment activity fell from 3.17% to 2.82% from its all-time high in October, exactly doubling the year-earlier rate of 1.46%. Prepayment rates should remain elevated as long as interest rates are at historic lows.

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