While seasonal factors were attributed to the monthly rise in mortgage delinquencies for June, the jump was still much higher than last year’s fairly steady increase, according to data from Black Knight. June’s total delinquency rate (mortgages at least 30 days late on a payment, but not yet in foreclosure) rose 10.8% from May to 3.73%. May’s rate of 3.36% was the lowest since Black Knight started tracking this data.
In its “first look” at the month’s loan performance statistics, Black Knight also found that the single month mortality rate (SMM), the pace at which mortgages are paid down or off, declined for the first time in five months. The prepayment rate had surged 24% in May to the highest level since late 2016 and more than doubled over the February-May period. Even with the downturn last month the rate remains 20% higher than in June 2018 at 1.14%.
Black Knight says that the national delinquency rate has set multiple consecutive record lows, but the calendar conspired against it in June. There is a seasonal tendency for delinquencies to rise in June and when any month ends on a Sunday. Both of these occurred last month causing the national delinquency rate spiked by nearly 11%.
The increase was all in early stage delinquencies. The serious delinquency rate hit its lowest level in 12 years, down 6,000 loans since May and 93,000 over the previous 12 months. There are now 455,000 loans that are more than 90 days past due or in foreclosure.