Black Knight: National Foreclosure Rate Decreased By More Than 30% In 2016
The mortgage delinquency rate (loans 30 days or more past due but not in foreclosure) dipped to 4.42% in December – a decrease of 0.91% compared with November and a decrease of 7.49% compared with December 2015, according to Black Knight Financial Services’ First Look report.
As of the end of the month, about 2.248 million properties were delinquent – a decrease of about 15,000 compared with November and a decrease of about 160,000 compared with December 2015.
About 682,000 properties were seriously delinquent (90 days or more past due but not in foreclosure) – flat compared with the previous month but a decrease of about 126,000 year over year.
The foreclosure inventory continued to shrink, as well, falling to 0.95% of all loans – a decrease of 3.29% compared with November and a decrease of 30.53% compared with December 2015.
There were about 59,700 foreclosure starts in December – a decrease of 1.16% compared with November and a decrease of 23.56% compared with November 2015.
The national foreclosure rate decreased by more than 30% in 2016, the report shows.
This marks the most improvement Black Knight has seen in any year on record.
The inventory of loans in active foreclosure fell by more than 200,000 during the year, ending at 483,000.
Prepayment activity continued to slow in December, as borrowers and the market reckoned with higher rates.
Banks Pushed Hard To Close Out ‘Legacy’ Foreclosures In Q4
More than half of the foreclosures that were completed in the fourth quarter were “legacy” files, going back to 2004-2008, a recent report from ATTOM Data Solutions shows.
“Foreclosures completed in the fourth quarter had been in the foreclosure process 803 days on average – a substantial jump from the third quarter and indicating that banks pushed through significant numbers of legacy foreclosures during the quarter,” reports Daren Blomquist, senior vice president at ATTOM Data Solutions, in the firm’s Year-End 2016 U.S. Foreclosure Market Report. “Despite that push, we still show that more than half of all active foreclosures nationwide are on loans originated between 2004 and 2008, with a much higher share of legacy foreclosures in some markets.”
The report shows that foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 933,045 properties in 2016, which is down 14% from 2015 to reach the lowest level since 2006, when there were 717,522 properties with foreclosure filings.
Foreclosure starts reached 478,857 for the year – down 16% compared with 2015 and down 78% compared with the peak of 2.139 million foreclosures in 2009. In fact, it was the lowest rate since ATTOM began tracking foreclosure starts in 2006.
The report also shows that 0.70% of all U.S. housing units had at least one foreclosure filing in 2016 – the lowest annual foreclosure rate nationwide since 2006, when 0.58% of housing units had at least one foreclosure filing.
So, where are most of those “legacy” files? According to ATTOM, states with the biggest backlogs (highest numbers) of legacy foreclosures, as of the end of December, include New Jersey (32,279), New York (31,838), Florida (29,411), California (17,208) and Illinois (12,244).
States with the biggest shares of legacy foreclosures include the District of Columbia (76%), Hawaii (66%), New Jersey (64%), Nevada (63%), Delaware (61%) and Massachusetts (61%).
Ocwen Helped 75,000 Homeowners Avoid Foreclosure In 2016
Ocwen Financial Corp. reports that it helped approximately 75,000 homeowners avoid foreclosure through loan modification programs – including the Home Affordable Modification Program (HAMP) – in 2016.
Ocwen claims that it leads all other servicers in HAMP modification activity. In 2016, the firm granted approximately 42,000 loan modifications through the HAMP program, many of which included a reduction in principal.
Ocwen also outperformed the industry under the new HAMP Streamline Modification Program, the firm claims in a release. In 2016, it completed more than 14,500 streamlined modifications and expects that number to increase as additional homeowners convert their trial plans into permanent modifications.
In the third quarter of 2016, Ocwen completed 20% of all HAMP modifications industry-wide, according to the latest HAMP report from the U.S. Department of the Treasury.
The firm claims this is 53% more HAMP modifications compared with “the next best servicer.”
What’s more, the firm granted 49% of all HAMP principal reduction modifications completed in the third quarter.
Since Jan. 1, 2008, Ocwen has granted approximately 720,000 modifications and has completed more principal reduction loan modifications than the three largest servicers combined, the firm boasts in its release.
Despite the expiration of HAMP at the end of 2016, Ocwen says it will continue to offer loan modifications to struggling borrowers.
CoreLogic: Completed Foreclosures Continued To Fall In November
The number of completed foreclosures in the U.S. continued to fall in November, according to CoreLogic.
The firm’s monthly foreclosure report shows that there were about 26,000 completed foreclosures in November 2016, the most recent month for which there was data as of press time – a decrease of 14.1% compared with about 30,000 in October and a decrease of about 30% compared with November 2015.
States with the highest numbers of completed foreclosures in the 12 months ended in November were Florida (48,000), Michigan (31,000), Texas (25,000), Ohio (22,000) and Georgia (20,000). These five states account for 36% of completed foreclosures nationally.
States with the lowest numbers of completed foreclosures, year over year, were the District of Columbia (221), North Dakota (260), West Virginia (375), Alaska (616) and Montana (627).
Completed foreclosures averaged about 22,000 per month nationwide between 2000 and 2006, according to CoreLogic’s historical data. At 26,000 in November, that means we’re getting very close to pre-crisis levels.
In addition, the foreclosure inventory decreased 2.4% compared with October, CoreLogic’s report shows. As of the end of November, the national foreclosure inventory stood at about 325,000 properties, or 0.8% of all homes with a mortgage, compared with 465,000 homes, or 1.2%, in November 2015.
States with the highest foreclosure inventory rates in November included New Jersey (2.8%), New York (2.6%), Maine (1.7%), Hawaii (1.7%) and the District of Columbia (1.6%).
States with the lowest foreclosure inventory rates were Colorado (0.2%), Minnesota (0.3%), Arizona (0.3%), Utah (0.3%) and California (0.3%).
As of the end of November, about 1 million mortgages, or 2.5%, were in serious delinquency (90 days or more past due but not in foreclosure) – the lowest level since August 2007. That’s a decrease of 22.1% compared with November 2015. The decline was geographically broad, with year-over-year decreases in serious delinquency in 48 states and the District of Columbia.
“The decline in serious delinquency has been substantial, but the default rate remains high in select markets,” says Frank Nothaft, chief economist for CoreLogic, in a statement. “Serious delinquency rates were the highest in New Jersey and New York, at 5.6 percent and five percent, respectively. In contrast, the lowest delinquency rate occurred in Colorado, at 0.9 percent, where a strong job market and home price growth have enabled more homeowners to stay current.”
“The seven percent appreciation in home prices through November 2016 has added an average of $12,500 in home equity wealth per homeowner across the U.S. during the last year,” says Anand Nallathambi, president and CEO of CoreLogic. “Sustained growth in home prices is clearly bolstering homeowners’ spending power and balance sheets and, as a result, spurring a continued drop in defaults.”