Mortgage

Severe fee defaults have been down 80,000 in November

Mortgages over 90 days past due continued to decline last month, but the number of loans in this category was still more than double what it was just before the pandemic.

Major bad debt losses in November were down 80,000 from October, but Black Knight's latest First Look report shows more than 1 million remaining. Only 409,000 loans were seriously overdue as of February 2020 but not in foreclosure.

The relative numbers for mortgages that have traditionally been on the verge of foreclosure in the absence of pandemic-related mandates, and the rate at which they have declined, suggest that a full recovery could take months, but possibly less than a year. Serious payment defaults decreased by almost 1.17 million compared to the previous year.

Overall, the improvement in defaults appears to be continuing, according to Black Knight. The national default rate, including late payments of 30 days or more, decreased 4.1% in November, in line with the average rate of decrease over the past 18 months.

What happens next, however, largely depends on how or if the rise of the Omicron variant, state monetary policies, and the status of temporary aid programs that are phasing out or being introduced are affecting the economy and credit performance.

Plans involving federally approved loan leniency for borrowers facing pandemic hardship expired in droves by November, with more than 800,000 exiting in the past two months, according to Black Knight.

"Given the size of this population, both serious crime and foreclosure metrics require special attention in early 2022," the data and technology provider said in its report.

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