It was the largest month-over-month decline in the delinquency rate in nine years.
The firm's Mortgage Monitor report also finds that the number of borrowers who were underwater on their mortgages in March decreased by 1.6 million to just over 4 million.
That's the good news. The bad news is that about 77% of borrowers who were in foreclosure in March were underwater. What's more, about 72% of borrowers who were delinquent (90 days or more past due) in March were underwater. That means there's still plenty of risk in these loans for investors and servicers.
Florida and California continued to have the highest number of properties underwater, according to the report, while Nevada and Florida had the most borrowers with negative equity.
Ben Graboske, senior vice president for Black Knight Data and Analytics, says, ‘Negative equity distribution varies considerably depending upon geographical location and home values within a given market.’
‘Our most recent data shows that just over eight percent of borrowers are currently underwater on their mortgages, representing a nearly 30 percent reduction in the negative equity rate since last year,’ Graboske says in a release. ‘We also observed that 29 percent of underwater borrowers are seriously delinquent on their mortgages and that borrowers in negative equity positions make up 77 percent of all active foreclosures. In fact, one of every three borrowers in active foreclosure has a current loan-to-value ratio of 150 or more, meaning they owe 50 percent more than their homes are worth.’
With regard to the drop in delinquencies, Graboske points out that it was ‘across all stages of delinquency – 30, 60, 90 and 120-plus days – with 30-day delinquencies hitting their lowest level in over 10 years.’
‘The month's data also showed that roll rates – loans rolling into a more delinquent status – have improved across the board as well,’ Graboske adds. ‘For every 10,000 loans that were current at the end of February, only 73 borrowers missed a payment in March, marking the lowest current-to-30 roll rate in over 15 years.’
Graboske says roll rates for loans 30-to-60 and 60-to-90 days delinquent hit their lowest levels since March 2006.
In addition, ‘The rate of loans curing from 30-days delinquent to current status was 40.7 percent, the highest level since March 2005 and slightly above the 2000 to 2005 average of 40.4 percent.’