Mortgage delinquencies up, underwater homes down

October 26, 2015

JACKSONVILLE, Fla. (10/26/15)--The national delinquency rate for mortgages climbed for the second straight month in September, rising to 4.9%, or the highest level since May, according to Black Knight Financial Services ( Oct. 23).

On a positive note, however, RealtyTrac reported last week that the share of U.S. homes that were seriously underwater dropped 0.6% to 12.7% in the third quarter.

Seriously underwater homes have mortgages that are worth more than 25% of the value of the home.

“After a lull late last year and early this year, home sales volume and average sales prices picked up dramatically again in the second and third quarters of this year, resulting in a substantial drop in seriously underwater homeowners,” said Daren Blomquist, RealtyTrac vice president.

“On the other hand,” Blomquist added, “the number and share of equity-rich homeowners dropped dramatically between the second and third quarters--continuing a trend from the previous two quarters--evidence that more homeowners in this category are leveraging their equity through a refinance, move-up sale or by completely cashing out of the housing market.”

As for mortgage delinquencies, despite climbing in the third quarter by nearly 5% and by 1.7% on a monthly basis, they remain 14% down on a year-over-year basis.

Prepayment activity, which can reflect future refinance activity, continues to slow, falling to 1.75% in September.

Black Knight also reported that total U.S. foreclosure starts climbed 4.86% to 79,000 during the month, down 16.25% on an annual basis.