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The U.S. mortgage delinquency rate jumped 13% in April from a record low in March, but the spike was exceptional due to a timing effect, Black Knight said in its First Look report on Wednesday.
The M/M rise was largely attributable to April “ending on a Sunday impacting the processing of payments made on the last calendar day of the month,” the report said. “More people than you might imagine are waiting for that very last day” to make a mortgage payment.
Early-stage defaults (borrowers 30 days past due) suffered the most, increasing by 200,000, or 25%, consistent with the impact of similar earlier timing events. Still, serious delinquencies (more than 90 days past due) continued to improve, with the number of such loans declining in 45 states plus Washington D.C.
“If historical trends continue, much – if not all – of this peak will likely reverse next month,” Black Knight said.
Additionally, housing starts of 25,000 foreclosures fell 23% in April, which is the lowest level since September 2022 and 45% below April 2019, before the pandemic. And the number of loans in active foreclosure fell by 6,000 in April and by 60,000, or 21%, from March 2020.
On the corporate finance front, bankruptcies have climbed since the start of 2023, followed to more normal levels.