Black Knight's First Look: Prepayment Activity Hit Record Low in October as Rates Topped 7%; Mortgage Delinquencies Up 4.5% in First Signs of Hurricane Ian Impact

Rhea-AI Summary

Black Knight (NYSE:BKI) released its October 2022 mortgage performance statistics, revealing a 16.5% drop in prepayments to a record low of 0.48%. The national delinquency rate rose 4.5% to 2.91%, driven by a 9.4% increase in 30-day delinquencies, with Florida leading in new delinquencies due to Hurricane Ian's impact. Foreclosure starts increased by 7% but remain 55% below pre-pandemic levels. The overall delinquency rate indicates a year-over-year decrease of 22.32%.

Positive

• October's foreclosure starts are 55% below pre-pandemic levels, indicating a moderated housing market.
• A national year-over-year decline of 22.32% in total loan delinquency is a positive indicator.

Negative

• Prepayment rates fell 16.5% month-over-month, indicating reduced refinancing activity.
• A sharp 4.5% monthly increase in delinquency rates may signal emerging stress in borrower payments.
• Loans 60 days past due increased by 2.9%, suggesting potential risk in loan performance.

- Prepayments fell 16.5% to a single-month mortality (SMM) rate of 0.48%, well below the previous record of 0.55% and the lowest recorded since at least 2000 when Black Knight began reporting the metric

- The national delinquency rate rose 4.5% in October to 2.91% – up 12 basis points since September – driven by a sharp 9.4% rise in 30-day delinquencies

- Florida led the jump in new early delinquencies (+19K) – with the state delinquency rate rising 53 basis points to 3.42% -- giving an initial indication of Hurricane Ian impact

- Loans 60 days past due ticked up 2.9% nationally, while those 90 or more days delinquent saw continued – if modest – improvement, inching down another 1.5% in October

- October's 19.6K foreclosure starts represented a 7% increase that partly reversed September's decline, but are still 55% below pre-pandemic levels

- Foreclosure starts were initiated on 4% of existing serious delinquencies in October, up slightly from September but still less than half the rate seen in the years leading up to the pandemic

- Active foreclosure inventory held steady as volumes have remained subdued in 2022 due to still historically low foreclosure start levels

JACKSONVILLE, Fla., Nov. 22, 2022 /PRNewswire/ -- Black Knight, Inc. (NYSE:BKI) reports the following "first look" at October 2022 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.         

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 2.91%
Month-over-month change: 4.45%
Year-over-year change: -22.32%

Total U.S. foreclosure pre-sale inventory rate: 0.35%
Month-over-month change: 0.42%
Year-over-year change: 33.22%

Total U.S. foreclosure starts: 19,600        
Month-over-month change: 6.52%
Year-over-year change: 390.00%

Monthly prepayment rate (SMM): 0.48%
Month-over-month change: -16.48%
Year-over-year change: -75.47%

Foreclosure sales as % of 90+: 0.59%
Month-over-month change: -1.47%
Year-over-year change: 117.07%

Number of properties that are 30 or more days past due, but not in foreclosure: 1,557,000
Month-over-month change: 66,000
Year-over-year change: -429,000

Number of properties that are 90 or more days past due, but not in foreclosure: 551,000
Month-over-month change: -7,000
Year-over-year change: -555,000

Number of properties in foreclosure pre-sale inventory: 186,000
Month-over-month change: 1,000
Year-over-year change: 48,000

Number of properties that are 30 or more days past due or in foreclosure: 1,743,000
Month-over-month change: 66,000
Year-over-year change: -382,000

Top 5 States by Non-Current* Percentage
Mississippi:                         6.50%
Louisiana:                            5.75%
Oklahoma:                          4.88%
Alabama:                             4.64%
West Virginia:                     4.47%

Bottom 5 States by Non-Current* Percentage
Colorado:                            2.05%
Oregon:                               1.99%
California:                            1.84%
Idaho:                                  1.74%
Washington:                        1.67%

Top 5 States by 90+ Days Delinquent Percentage
Mississippi:                          2.38%
Louisiana:                            1.90%
Alabama:                             1.66%
Oklahoma:                           1.55%
Arkansas:                            1.54%

Top 5 States by 6-Month Change in Non-Current* Percentage
Alaska:                                  -23.82%
Hawaii:                                 -20.35%
New York:                            -14.00%
North Dakota:                      -10.47%
New Jersey:                         -3.13%                                                                 

Bottom 5 States by 6-Month Change in Non-Current* Percentage
Iowa:                                     22.96%
Florida:                                 16.80%
Colorado:                             15.91%
South Dakota:                     13.12%
Arizona:                               12.43%                                                                                 

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Notes:
1)            Totals are extrapolated based on Black Knight's loan-level database of mortgage assets.
2)            All whole numbers are rounded to the nearest thousand, except foreclosure starts, which are rounded to the nearest hundred.

For a more detailed view of this month's "first look" data, please visit the Black Knight newsroom. The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by detailed charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available online at https://www.blackknightinc.com/data-reports/ by Dec. 5, 2022. For more information about gaining access to Black Knight's loan-level database, please send an email to Mortgage.Monitor@bkfs.com.

About Black Knight

Black Knight, Inc. (NYSE:BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and servicing and real estate industries, as well as the capital and secondary markets. Businesses leverage our robust, integrated solutions across the entire homeownership life cycle to help retain existing customers, gain new customers, mitigate risk and operate more effectively.

Our clients rely on our proven, comprehensive, scalable products and our unwavering commitment to delivering superior client support to achieve their strategic goals and better serve their customers. For more information on Black Knight, please visit www.blackknightinc.com.

For more information:
Michelle Kersch	Mitch Cohen
904.854.5043	704.890.8158
michelle.kersch@bkfs.com	mitch.cohen@bkfs.com

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/black-knights-first-look-prepayment-activity-hit-record-low-in-october-as-rates-topped-7-mortgage-delinquencies-up-4-5-in-first-signs-of-hurricane-ian-impact-301684256.html

SOURCE Black Knight, Inc.

FAQ

What were the mortgage delinquency rates reported by Black Knight for October 2022?

The national delinquency rate rose to 2.91%, marking a 4.5% month-over-month increase.

How much did prepayment rates decline in October 2022?

Prepayment rates fell by 16.5% to a record low of 0.48%.

What impact did Hurricane Ian have on mortgage delinquencies in Florida?

Florida experienced a significant increase in early delinquencies, with a rise of 19,000 cases.

What is the current status of foreclosure starts according to Black Knight?

Foreclosure starts increased by 7% in October 2022 but remain 55% below pre-pandemic levels.

How does the October 2022 foreclosure inventory compare to previous years?

Active foreclosure inventory remained steady, with subdued volumes due to historically low foreclosure start levels.