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Delinquencies ride economic tailwinds to record lows in March

The national mortgage delinquency rate hit a record low in March as economic tailwinds helped previously past-due borrowers to make significant gains toward becoming current, a new Black Knight report found.

The 2.84% rate of borrowers 30 days or more past due in March was a 15.5% decline from February and broke the previous historic low of 3.22% in January 2020, according to Black Knight’s first look at mortgage performance statistics. The findings come after overall delinquencies rose in February due to nearly 100,000 borrowers with new late payments, then driven by an uptick in early-stage delinquencies.

Strong general unemployment gains and extended student loan deferrals aided borrowers in being able to make their payments, Black Knight suggested, while millions are being helped by low interest rates secured during the refinance boom. The rate of new and seriously delinquent borrowers both declined by double-digit percentages in March, according to Black Knight.

The positive momentum was powered by a decline of 20% or 270,000 fewer properties that were 30 days or more past due but not in foreclosure, the report said. Serious delinquencies, or properties 90 days or more past due but not in foreclosure, fell 12% in March, the most in 20 years, according to Black Knight. Still, nearly 700,000 borrowers remain seriously delinquent.

The improvements drove foreclosure starts down nearly 3% in March, with 24,300 nationwide, Black Knight found. However, active foreclosures edged up by 7,000 properties for the first year-over-year increase in almost 10 years.

Prepayment activity also ticked up 9% in March to 1.22% nationwide, the report said, driven partially by seasonal increases in home sales-related prepayments. But prior Black Knight research indicates sales activity could be impacted during the spring homebuying season, with affordability nosediving due to rising interest rates and soaring housing prices.

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