Despite short-term improvements, borrowers with mortgage payments 90 days late outstripped the pre-pandemic total by more than 1 million last month.
The 1.45 million lumbering borrowers in July who were not yet in foreclosure declined from 1.55 million in June to 2.25 million a year earlier, according to Black Knight's latest First Look report. The corresponding number before the pandemic was well below 500,000.
The national total crime rate fell to 4.1% and 2.2 million from 4.4% and 2.3 million a month earlier and from 6.9% and 3.7 million in July 2020. This rate was 3 in February 2020 , 3%, the last full month before coronavirus-related closures occurred in the US.
As the number of defaults improves as the economy recovers, service providers are focusing more on those who still have deferred payments and are more likely to face long-term distress. (Black Knight's default numbers include borrowers with pandemic suspension.)
"Most of the people who are currently in Forbearance become delinquents and then more serious delinquents," said Bob Hora, SVP of Default Operations at Cenlar, in an interview. “Then the question arises, can they make their current payment or do they need some kind of change? We believe a percentage of these homeowners have weaned themselves off making their payments in the past 18 months and they won't even be able to work at a discounted rate. "
About 4,200 borrowers began foreclosures in July, the final month of the government moratorium – although this could be extended in some areas with the advent of the delta variant. The initial foreclosure rate decreased 4.6% monthly and 57.6% annually. The percentage of borrowers in active foreclosure decreased from 0.27% in June to 0.26%.
At the state level, Mississippi had the highest long-term borrower rate at nearly 7.7%, followed by 6.9% in Louisiana, 6.1% in Hawaii, 5.9% in Oklahoma, and 5.8% in West Virginia. Similarly, the five highest serious crime rates were recorded in Mississippi at 4.6%, Louisiana at 4.2%, Hawaii at 3.83%, Maryland at 3.81%, and Alaska at 3.8%.