Black Knight's November Mortgage Monitor: Home Price Recovery Lagging for Lower- Value Properties in Hardest-Hit States; HAMP Modifications Shift to FHA/VA in 2014
-- Home prices for lower-value properties remain further off pre-crisis peaks than higher-valued homes in hardest-hit states
-- Higher-valued homes did not rise or fall as drastically as lower-valued homes in bubble states
-- 2014 HAMP activity shifted overwhelmingly to FHA/VA modifications
-- November spike in delinquencies due to seasonality, fewer business days for payment processing
JACKSONVILLE, Fla., Jan. 12, 2015 /PRNewswire/ -- Today, the Data and Analytics division of Black Knight Financial Services released its latest Mortgage Monitor Report, based on data as of the end of November 2014. Leveraging data from Black Knight's Home Price Index (HPI), the company found that home price recovery varies significantly for properties within different tiers of home value. According to Trey Barnes, Black Knight's senior vice president of Loan Data Products, home price recovery for the lowest 20 percent of property values has lagged behind those at the top in America's hardest hit states.
"We looked at HPI appreciation from pre-crisis peaks to today in the 10 states currently trailing the furthest behind their pre-crisis housing maximums," said Barnes. "The data showed a clear difference in the levels of recovery among home price tiers. The Black Knight HPI separates home values for every geographical division into five equal tiers; those in the lowest 20 percent of home values have been lagging behind their higher-valued counterparts in recovery to pre-crisis peaks, sometimes considerably.
"For example, in Nevada – overall, still more than 39 percent off its pre-crisis peak – properties in the lowest tier are nearly 47 percent off their peaks, as compared to 36 percent for those in the highest tier. In California, an even starker contrast emerges: properties in the highest tier have now come within just over 3 percent of their pre-crisis peak, while those in the lowest 20 percent are still almost 32 percent down. In many cases, these disparities between price tiers can be attributed to the fact that during the bubble, lower-tier properties appreciated at much higher rates than higher-valued properties and likewise fell harder and further when the bubble broke."
Black Knight also looked at loan modification distribution, and found that activity was down overall in 2014. Modifications performed under the government's Home Affordable Modification Program (HAMP) accounted for over 50 percent of all modifications throughout the year, with the majority of activity focused on FHA/VA-backed mortgages. Close to 70 percent of 2014 HAMP modifications were on FHA/VA loans, as compared to about 15 percent in 2013. While HAMP modifications generally include greater payment reductions than proprietary modifications, HAMP payment reductions have been lower in 2014; due in no small part to the lower unpaid balances – and therefore starting monthly payments – on most FHA/VA loans. Also, although HAMP modifications exhibit lower re-default rates than proprietary modifications across all vintages, early figures are showing that re-defaults among 2014 HAMP modifications are higher than those of both 2012 and 2013.
Finally, Black Knight performed a deeper analysis on this month's 11.8 percent spike in the national delinquency rate. While seasonality suggests that such increases can be expected each November, this was the largest such jump in six years; in fact, it was the largest month-over-month increase for any month since November 2008. However, the size of the increase can be largely attributed to a reduced number of payment processing days for the month (given two federal holidays and the month ending on a Sunday). For context, the five largest month-over-month increases in delinquencies of the past seven years have all occurred in months ending on Sundays.
| As was reported in Black Knight's most recent First Look release, other key results include: |
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| Total U.S. loan delinquency rate: |
6.08% |
| Month-over-month change in delinquency rate: |
11.82% |
| Total U.S. foreclosure pre-sale inventory rate: |
1.63% |
| Month-over-month change in foreclosure pre-sale inventory rate: |
-3.50% |
| States with highest percentage of non-current* loans: |
MS, NJ, LA, NY, FL |
| States with the lowest percentage of non-current* loans: |
MT, CO, SD, AK, ND |
| States with highest percentage of seriously delinquent** loans: |
MS, RI, LA, AL, AR |
| *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. |
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| **Seriously delinquent loans are those past-due 90 days or more. |
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| Totals are extrapolated based on Black Knight Financial Services' loan-level database of mortgage assets. |
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About the Mortgage Monitor
The Data and Analytics division of Black Knight Financial Services manages the nation's leading repository of loan-level residential mortgage data and performance information on approximately two-thirds of the overall market, including tens of millions of loans across the spectrum of credit products and more than 140 million historical records. The company's research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for the monthly Mortgage Monitor Report. To review the full report, visit:
http://www.bkfs.com/CorporateInformation/NewsRoom/Pages/Mortgage-Monitor.aspx
About Black Knight Financial Services, LLC
Black Knight Financial Services, a Fidelity National Financial (NYSE: FNF) company, is the mortgage and finance industries' leading provider of integrated technology, data and analytics solutions that facilitate and automate many of the business processes across the mortgage lifecycle.
Black Knight Financial Services is committed to being the premier business partner that lenders and servicers rely on to achieve their strategic goals, realize greater success and better serve their customers by delivering best-in-class technology, services and insight with a relentless commitment to excellence, innovation, integrity and leadership. For more information on Black Knight Financial Services, please visit www.bkfs.com.
SOURCE Black Knight Financial Services
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