What a difference a year can make. At this point in 2020, mortgage service providers were preparing for a tidal wave of hardship as coronavirus unemployment and insecurity increased. Now that the economy has recovered, crime performance hit a full 180, according to Black Knight, with the "biggest one month improvement" in 11 years.
The latest Mortgage Monitor showed that 217,000 homeowners defaulted on home loans in March, an all-time low of 429,000 in February. The overall crime rate fell from 6% m / m to 5.02%, but rose from 3.39% year-over-year – before the financial impact of the pandemic actually hit.
"The distribution of 159 million stimulus payments totaling more than $ 376 billion, a broader economic improvement that resulted in nearly a million new jobs, and 1.2 million forbearance plans that were being reviewed for extension or removal resulted in In the last 30 days, the planned volume has decreased by 11%. " Ben Graboske, President of Data and Analytics at Black Knight, said in a press release.
Prepayment activity reached a 17-year high as mortgage rates remained cheap for borrowers. Activity increased by 17.3% month-on-month to 91%. While arrears typically increase seasonally well into spring, data from April suggest further improvement. The numbers through April 23 showed a prepayment rate of 91.6%. In addition, the overall lending performance of the 7.1 million borrowers who fell under COVID-19 forbearance plans is generally strong, Graboske added.
Meanwhile, the 90-day arrears decreased from 2.07 million in February to 1.92 million. However, the figure is five times higher than it was before the pandemic, as there are still many consumers in trouble, borrowers choosing to stay under leniency and a number of borrowers staying under cover because they cannot be reached.
Foreclosure starts rose 28.2% m / m from 3,887 to 4,961, while active foreclosures fell from 167,944 in February to another record low of 162,329. March 2020 launches totaled 27,585 and active plans 220,271. However, foreclosure guidelines remain fluid as government agencies try to align and figure out the best plan for the future. The housing markets along the East Coast and the Midwest are currently the most vulnerable to foreclosures.