Mortgage delinquencies increased at record rates in April
Kathleen Pender - San Francisco Chronicle
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More than 3.6 million homeowners nationwide were past due on their mortgages at the end of April, the most since January 2015, according to estimates issued Thursday by Black Knight, a mortgage-data company.
That’s an increase of 1.6 million since March, the largest single-month jump on record.
Nationally, 6.85% of mortgages were not current at the end of April, roughly double the 3.81% in that condition at the end of March. Not current means they were at least 30 days past due or in foreclosure. It includes past-due mortgages in forbearance programs, as well as those that were not in forbearance.
“California and the Bay Area have a far lower share of non-current loans than the national average, which contributed to a particularly high month-over-month change,” said Black Knight spokesman Mitch Cohen.
Statewide, 5.73% of homeowners were not current at the end of April, up from 2.16% at the end of March. However, that increase of 3.6 percentage points was the ninth highest of any state. The states with the largest increase were Nevada (5.2 percentage points) and New Jersey (5.1 points).
In the San Francisco metro area, non-current loans rose to 3.59% at the end of April, triple the 1.17% at the end of March. In San Jose, they jumped to 2.8% from 0.8%, according to Black Knight.
Among the 100 largest metro areas, the cities with the biggest jumps were Miami (+7.2 points), Las Vegas (+6.2 points) and New York City (+5.4 points).
Under the Cares Act, homeowners with mortgages backed by the federal government who can show a financial hardship as a result of the coronavirus can defer their payments for up to six months upon request, followed by an additional six months.
The missed payments still must be paid at some point, which was causing concern for some homeowners. Although borrowers could be forced to pay the full amount in a lump sum at the end of the forbearance period, Fannie Mae, Freddie Mac and the Federal Housing Administration said they wouldn’t do that on loans they guaranteed; they would give homeowners other options, such as extending the term or adding the missed payments to the loan balance.
On May 12, the Federal Housing Finance Agency announced another option for homeowners with loans backed by Fannie and Freddie: Those who could resume making their normal monthly mortgage payment could repay the missed payments at the time the home is sold, refinanced or at maturity. The FHA had previously offered a similar option for borrowers in Cares Act forbearance.
On Monday, the Mortgage Bankers Association said that the number of loans in forbearance increased from 7.91% of servicers’ portfolio volume in the prior week to 8.16% as of May 10. According to MBA’s estimate, 4.1 million homeowners are now in forbearance plans.
Black Knight, whose data includes loans backed by the government as well as non-government loans, noted that foreclose starts and foreclosure sales hit record lows in April “as moratoriums halted foreclosure activity across the country.”
The rate at which borrowers prepay their mortgages jumped 23% from March to hit the highest monthly prepayment rate in 16 years, as borrowers rushed to refinance their loans at lower rates.
