Just one month after experiencing the largest monthly increase in six years, the nation's mortgage delinquency rate took a big tumble in December, according to Black Knight Financial Services'December 2014 "First Look" at Mortgage Datareleased Friday.

The mortgage delinquency rate, or the number of mortgage loans that are 30 days or more past due but not in foreclosure, dropped down to 5.6 percent for December – a decline of 7.2 percent from November and 12.7 percent from December 2013. The number of properties with early stage delinquencies dropped by 220,000 from November to December (to 2.86 million total). When factoring in properties in foreclosure, the total increased to 3.68 million, still a significant decline by 229,000 from November and by 800,000 from December 2013.

The number of mortgage loans that were 90 days or more overdue but not in foreclosure decreased by 31,000 month-over-month (and 148,000 year-over-year) down to 1.13 million.

Foreclosure inventory continued its decline. As of the end of December, there were 820,o00 residential properties in some state of foreclosure, representing a nearly 35 percent decline from December 2013 (and a 1.1 percent drop from November to December).

Foreclosure starts, while down nearly 15 percent year-over-year in December, experienced a 21 percent jump from November up to 89,400. The monthly pre-payment rate, which is generally a good indicator of refinance activity, skyrocketed both month-over-month and year-over-year by 25 percent and 28 percent, respectively, up to 1.57 percent, its highest level since August 2013.

The number of properties in foreclosure pre-sale inventory fell to 820,000 in December, down by 9,000 from the previous month and by 424,000 from the previous December.

 

by Brian Honea