ICE First Look at Mortgage Performance: Delinquencies Improve and Foreclosures Drop as Prepayments Rise Modestly
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Insights
The observed decline in the national delinquency rate to 3.34% suggests a stabilizing housing market, which can have mixed effects on the economy. On one hand, lower delinquency rates can lead to increased consumer confidence and spending, as homeowners feel more financially secure. On the other hand, the decrease in foreclosure starts and sales indicates a contracting market for distressed properties, which could limit opportunities for investors looking for undervalued assets.
The year-over-year decrease in serious delinquencies by 18% reflects an improving job market and economic conditions, potentially leading to a reduction in loan-loss provisions for financial institutions. This can have a positive impact on the banking sector's profitability and stock performance. However, the modest increase in prepayment activity signals that homeowners are taking advantage of lower rates to refinance, which could lead to a short-term dip in interest income for mortgage lenders.
The data showing a decrease in loans 30 or more days past due and the reduction in the foreclosure pre-sale inventory rate by 25% below pre-pandemic levels indicate a robust recovery in the housing market. This trend is favorable for mortgage servicers and insurers, as it implies lower costs associated with managing delinquent loans and foreclosed properties.
However, the regional disparities highlighted by the top and bottom states by non-current percentage reveal that recovery is uneven across the country. States with higher delinquency rates may see slower real estate appreciation and could be at risk for localized market downturns, affecting regional banks and real estate investments.
The decline in the number of properties 30 or more days past due, along with a decrease in foreclosure sales, suggests a healthier consumer balance sheet. This could lead to increased borrowing and spending, potentially boosting retail and consumer sectors. Financial institutions with exposure to the mortgage market might experience lower default-related losses, which is a positive indicator for investors evaluating the risk profiles of these companies.
The data provided by Intercontinental Exchange, Inc. adds transparency to the mortgage market and can be a valuable tool for investors monitoring the health of the housing sector, which is a significant component of the economy. The performance of ICE's stock may reflect investor sentiment about the broader financial data services industry and its role in providing critical market insights.
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The national delinquency rate eased to
3.34% in February, down 4 basis points (bps) from the month before and 11 bps lower than in February 2023 - While the number of borrowers one payment behind rose modestly by 10K, those 60 days late as well as those 90 or more days past due both fell to their lowest levels in three months
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Delinquency inflows rose
6.5% from January’s eight-month low, while rolls to later stages continued their recent improvement -
Serious delinquencies (loans 90+ days past due but not in active foreclosure) are down 103K (-
18% ) year over year, with the population now standing at 459K -
Representing
5.3% of serious delinquencies, February’s 25K foreclosure starts is the second lowest in the last twelve months -
The number of loans in active foreclosure fell -7K to 211K, remaining
25% (-72K) below pre-pandemic levels -
6K foreclosure sales were completed nationally in February, a
9% decrease from the previous month and the second lowest level in the trailing 12-month period - Prepayment activity rose 3 bps in February to a level not seen since October, as a brief dip in rates heading into the month provided a modest increase in refinance incentive
Data as of Feb. 29, 2024
Total
Month-over-month change: -
Year-over-year change: -
Total
Month-over-month change: -
Year-over-year change: -
Total
Month-over-month change -
Year-over-year change: -
Monthly prepayment rate (SMM):
Month-over-month change:
Year-over-year change:
Foreclosure sales: 6,000
Month-over-month change: -
Year-over-year change: -
Number of properties that are 30 or more days past due, but not in foreclosure: 1,782,000
Month-over-month change: -21,000
Year-over-year change: -29,000
Number of properties that are 90 or more days past due, but not in foreclosure: 459,000
Month-over-month change: -11,000
Year-over-year change: -103,000
Number of properties in foreclosure pre-sale inventory: 211,000
Month-over-month change: -7,000
Year-over-year change: -28,000
Number of properties that are 30 or more days past due or in foreclosure: 1,993,000
Month-over-month change: -28,000
Year-over-year change: -57,000
| Top 5 States by Non-Current* Percentage | |
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| Top 5 States by 90+ Days Delinquent Percentage | |
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| Top 5 States by 12-Month Change in Non-Current* Percentage | |
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*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Notes:
1) Totals are extrapolated based on ICE’s McDash loan-level database of mortgage assets.
2) All whole numbers are rounded to the nearest thousand, except foreclosure starts and sales, which are rounded to the nearest hundred.
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.icemortgagetechnology.com/resources/data-reports by April 1, 2024.
For more information about gaining access to ICE’s loan-level database, please send an email to Mortgage.Monitor@bkfs.com.
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE’s futures, equity, and options exchanges – including the New York Stock Exchange – and clearing houses help people invest, raise capital and manage risk. We offer some of the world’s largest markets to trade and clear energy and environmental products. Our fixed income, data services and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At ICE Mortgage Technology, we are transforming
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 8, 2024.
Category: Mortgage Technology
ICE-CORP
Source: Intercontinental Exchange
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321322411/en/
ICE Media Contact
Mitch Cohen
mitch.cohen@bkfs.com
+1 704-890-8158
ICE Investor Contact:
Katia Gonzalez
katia.gonzalez@ice.com
+1 (678) 981-3882
Source: Intercontinental Exchange
FAQ
What is the national delinquency rate reported by Intercontinental Exchange, Inc. (ICE) in February 2024?
How does the total U.S. foreclosure pre-sale inventory rate compare month-over-month according to ICE's data?
What is the year-over-year change in the total U.S. foreclosure starts based on ICE's report?
What is the month-over-month change in the monthly prepayment rate (SMM) according to ICE's data?
Where can the detailed Mortgage Monitor report by Intercontinental Exchange, Inc. (ICE) be accessed?
