A report by Black Knight show mortgage delinquencies in January rose sharply. Delinquencies are up 167,000, up 6.6%. This is the first time in nearly a year that the delinquency rate rose above 5%.

Please consider the Black Knight report Delinquencies Up Sharply; Prepayment Rate Drops.

Highlights

  • Delinquency rate up 6.6 percent in January; back above 5 percent nationally for the first time in 11 months
  • Prepayment rate ( historically a good indicator of refinance activity) dropped 29 percent to its lowest level since February 2014
  • Foreclosure sales (completions) up nearly 16 percent following holiday moratoriums
  • Active foreclosure inventory continues to decline; down 26 percent from last year

    • Start of New Trend?

    Is this the start of a new trend?

    I think so, but one month does not a trend make. There is one noticeable caveat to the report.

    I talked with Black Knight regarding the significance of the huge jump and they replied “January ended on a Sunday, and historically, months that do tend to see elevated levels of delinquencies because payments can’t be processed on the last two days of the month.”

    To be safe we need to watch the next few month’s of data.

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