MORTGAGE MONITOR - Black Knight, Inc. · This month, as always, we begin with a review of some of...

SEPTEMBER 2018 REPORT

MORTGAGE MONITOR

https://www.blackknightinc.com/data-reports/?report-type=mortgage-monitor&report-year=2018

https://www.blackknightinc.com/

Confidential, Proprietary and/or Trade Secret TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, and/or an affiliate. © 2018 Black Knight Financial Technology Solutions, LLC. All Rights Reserved.

MORTGAGE MONITOR

SEPTEMBER 2018 | 2Confidential, Proprietary and/or Trade Secret TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, and/or an affiliate. © 2018 Black Knight Financial Technology Solutions, LLC. All Rights Reserved.

SEPTEMBER FIRST LOOK RELEASE

BREAKING DOWN THE SPIKE IN DELINQUENCIES

FORECLOSURE NORMALIZATION

RATE INCREASE IMPACT ANALYSIS

APPENDIX

DISCLOSURES

3

4

9

12

19

22

CONTENTS

Each month, the Black Knight Mortgage Monitor looks at a variety of issues related to the mortgage finance and housing industries.

This month, as always, we begin with a review of some of the high-level mortgage performance statistics reported in the company’s most recent First Look report, with an update on delinquency, foreclosure and prepayment trends. We then drill down specifically into the driving forces behind September’s spike in delinquencies, which represented the largest single-month increase in nearly 10 years. We also take a look at early mortgage-related impacts from Hurricane Florence and try to give a sense of what we might expect with regard to Hurricane Michael as well.

September marked the first time that foreclosure inventory recovered to pre-recession “norms” since 2006. We take a closer look at recovery levels across the country and explore Q3 foreclosure start activity to get a sense of what foreclosure normalization looks like. Finally, we examine the level of refinance incentive in the market and look at how that incentive shifts under varying interest rate scenarios. Leveraging the latest data from the Black Knight Home Price Index, we also look at the affordability landscape across the country in light of recent rate increases and put it in context with historic benchmarks.

In producing the Mortgage Monitor, Black Knight’s Data & Analytics division aggregates, analyzes and reports upon the most recently available mortgage performance data from the company’s McDash loan-level database. For more information on McDash, the Mortgage Monitor or Black Knight in general, please call 844-474-2537 or email [email protected].

SEPTEMBER 2018 OVERVIEW

MORTGAGE MONITOR




https://www.blackknightinc.com/black-knights-first-look-at-september-2018-mortgage-data/

http://www.bkfs.com/Data-and-Analytics/DivisionInformation/Solutions/Mortgage-Performance-Data-and-Analytics/Pages/McDash-Loan-Data.aspx

mailto:mortgage.monitor%40bkfs.com?subject=

https://twitter.com/black_knightinc?lang=en

https://www.linkedin.com/company/blackknight/



MORTGAGE MONITOR

SEPTEMBER 2018 | 3

Here we have an overview of findings from Black Knight’s ‘First Look’ at September mortgage performance data. This information has been compiled from Black Knight’s McDash loan-level mortgage performance database. You may click on each chart to see its contents in high-resolution.

SEPTEMBER 2018 FIRST LOOK RELEASE

While September brought a triple-threat of mortgage performance impacts, the dramatic spike in delinquencies is likely to be short-lived.

SEPTEMBER OVERVIEW STATS

CHANGE IN DELINQUENCY RATE

September saw the largest delinquency spike in nearly a decade

Calendar, seasonal and hurricane-related forces drove the rise

13.2%

TOTAL FORECLOSURE STARTS

September foreclosure starts hit a nearly 18-year low

Just 40K starts were initiated

ACTIVE FORECLOSURES

Active foreclosures have now fallen below pre-recession averages

268K loans remain in active foreclosure

-15% -4.5%



http://www.blackknightinc.com/wp-content/uploads/2018/11/BKI_MM_Sep2018_Chart01.pdf

https://www.blackknightinc.com/black-knights-first-look-at-september-2018-mortgage-data/





http://www.blackknightinc.com/wp-content/uploads/2018/10/BKI_MM_Aug2018_Chart01.pdf

http://www.blackknightinc.com/wp-content/uploads/2018/10/BKI_MM_Aug2018_Chart01.pdf


MORTGAGE MONITOR

SEPTEMBER 2018 | 4

Here, we drill down into the driving forces behind September’s spike in delinquencies, which represented the largest single-month increase in nearly 10 years. This information has been compiled from Black Knight’s McDash loan-level mortgage performance database. You may click on each chart to see its contents in high-resolution.

SEPTEMBER 2018 BREAKING DOWN THE SPIKE IN DELINQUENCIES

6%

1%

-4% -2.7%

-9%

-14%>, L.. ctl ::i C ctl -,

AVERAGE MONTHLY CHANGE IN DELINQUENCY RATE (SINCE JANUARY 2000)

+5.2%+3.7%

+2.5%+0.9% - +1.0%- -- -0.2% -

-1.6% -2.6%

-10.9%

>, ..c ·;:: >, (1.) � ti L.. L.. L.. (.) ctl C (1.) (1.) ctl L.. 0.. � ::i ::i ::i .c .c ::i ctl <( -, -, Cl E � L.. � ::i .c <( (1.) (1.) Q. 0LL

(1.) Cf)

+4.5%

+1.7%

L.. L.. (1.) (1.) .c .c E E (1.) (1.) > (.) 0 (1.) z 0

BLACK tKNIGHT"

MONTHLY CHANGE IN DELINQUENCY RATE 15%

■ Sunday Month-Ends ■ Non-Sunday Month-Ends+12.9% +13.2%

+11.2% +11.8%

10% +9.4%+8.2%

. .I I.. +6.6%+5.1%

11 I I I_.I .11 5%

1 .• I 0% • I .I J. .II111

•1 I 1•11· 1· I -111 I 11111 II I I I I ·r I r .. II

-5%

-10%

-15% .... sq- r-- 0 .... sq- r-- 0 .... sq- r-- 0 .... sq- r-- 0 .... sq- r-- 0 .... sq- r-- 0 sq- r--0 0 0 .... 0 0 0 .... 0 0 0 .... 0 0 0 .... 0 0 0 .... 0 0 0 .... 0 0 0

I I I I I I I I I I I I I I I I I I I I I I I I I I I N N N N (") (") (") (") sq- sq- sq- sq- I!) I!) I!) I!) c.o c.o c.o c.o r-- r-- r-- r-- co co co .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N

BLACK tKNIGHT"

» The two primary drivers behind September’s spike in mortgage delinquencies were calendar-related

» September delinquency increases are very common; so much so that we’ve seen them in 16 of the past 19 years

» The average September delinquency rate increase is +5.2%, the highest of any month

» This September also ended on a Sunday, which means servicers were unable to process last-minute payments on the final two calendar days of the month

» Sunday month-ends have accounted for 8 of the 9 largest single-month increases in delinquencies over the past 7 years

» Septembers that end on a Sunday have averaged a 13.2% jump in delinquencies, the exact increase we saw this year

AVERAGE MONTHLY CHANGE IN DELINQUENCY RATE(SINCE JANUARY 2000)

MONTHLY CHANGE IN DELINQUENCY RATE







MORTGAGE MONITOR

SEPTEMBER 2018 | 5

» Increases varied from a low of +7% in Florida to more than 20% in the Dakotas and Carolinas

» The Carolinas' increase was heightened due to Hurricane Florence, while the Dakotas are typically more prone to seasonal effects

» Despite the increase, delinquency rates in North Dakota (2%) and South Dakota (2.5%) remain well below the national average

» Florida’s relatively lower increase is a result of continued recovery from the 2017 hurricane season partially offsetting seasonal and calendar-driven increases

» The increased seasonal nature of delinquencies in the central U.S. vs. coastal areas we’ve reported on in the past appears to be taking shape again this year

+13%

+14%+15%

+12%

+16%

+12%

+10%

+13%

+13%

+17%

+16%

+15% +13%

+17%+17%

+13%

+12%

+13%

+19%

+16%

+10%

+13%

+23%

+24%

+13%

+16%

+12%

+14%

+10%

+14%

+13%

+16%

+15%

+11%

+22%

+21%

+13%

+1 1%

+14%

+14%

+10%

+13%

+7%

+5% +20%

Change

Map based on Longit ude ( generat ed) and Lat it ude ( generat ed) . Color shows sum of Change. The marks are labeled by sum of Change. Det ails are shown for St at e.

1-MONTH CHANGE IN DELINQUENCY RATE1-MONTH CHANGE IN DELINQUENCY RATEDelinquency rates rose in every state in the nation in September






MORTGAGE MONITOR

SEPTEMBER 2018 | 6

» As we’ve noted in the past, FHA/VA loans and PLS loans are more prone to seasonality, with delinquencies improving more heavily in the spring and increasing more heavily in the fall

» This is likely due to the borrower profile of those utilizing these products, with lower down payments and fluctuating cash reserves throughout the year

+0.35%Now 1.7%

+1.03%Now 5.0%

+0.10%Now 3.0%

+1.12%Now 14.4%

+0.46%Now 3.50%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

GSE FHA/VA Portfolio Private Securities Total Market

DELINQUENCY RATE INCREASE BY INVESTORAugust DQ Rate September Increase

DELINQUENCY RATE INCREASE BY INVESTORDelinquencies increased most among Private Labeled Securities and FHA mortgages, with each experiencing a more than one percentage point rise






MORTGAGE MONITOR

SEPTEMBER 2018 | 7

» As of October 19th, there are now 39 counties FEMA has declared disaster areas related to Hurricane Florence, affecting 565K homeowners with mortgages

» The largest rise in Florence-related delinquencies is expected in October (the first due date for most borrowers following the storm)

» However, early signs are evident in September's mortgage performance data despite the vast majority of mortgage payments being due weeks before the storm made landfall

» Duplin, Robeson, Pender and Columbus counties have seen the heaviest impact to date, with more than 3% of affected homeowners becoming past due

» With the counties added since last month, an identical per capita impact as Harvey and Irma last year would result in 29K delinquencies, peaking in November

MARLBORO+1.6%

MARION+1.2%

FLORENCE+1.2%

CHESTERFIELD+1.7%

WAYNE+1.6%

SCOTLAND+1.4%

SAMPSON+1.2%

RICHMOND+1.4%

PITT+0.7%

NEW HANOVER+1.7%

HARNET T+1.3%

CRAVEN+1.7%

ANSON0.0%

GEORGETOWN+0.4%

CUMBERLAND+1.5%

DARLINGTON+1.4%

BRUNSWICK+1.3%

COLUMBUS+3.3%

JOHNSTON+0.8% BEAUFORT

+1.5%

CARTERET+1.6%ROBESON

+3.6%

PAMLICO+0.6%

ONSLOW+2.2%

ORANGE0.0%

+0.5%GREENE

+2.9%

PENDER+3.3%

BLADEN+2.6%

WILSON+0.8%

MOORE+0.4% LENOIR

+2.1%

DUPLIN+3.7%

DILLON+0.9%

HORRY+0.6%

JONES+0.9%UNION

+0.1%

HOKE+1.0%

HYDE+1.8%

LEE

ESTIMATED RISE IN DELINQUENCY RATEATTRIBUTED TO HURRICANE FLORENCE

Map based on Longitude (generated) and Latitude (generated). Color shows sum of Hurricane Related Non-Current Increase. The marks are labeled by County and sum of Hurricane Related Non-Current Increase. Details are shown for State and County.

ESTIMATED RISE IN DELINQUENCY RATE ATTRIBUTED TO HURRICANE FLORENCE Of the 565K mortgage holders affected by

the storm, more than 6,000 have already fallen behind on mortgage payments






MORTGAGE MONITOR

SEPTEMBER 2018 | 8


» 25 counties have thus far been declared as FEMA disaster areas following Hurricane Michael

» Some 378K residential properties are located in the storm's disaster areas, only 126K of which are estimated to carry a mortgage, roughly 70% fewer mortgaged properties than in Hurricane Florence disaster areas

» Given the volume differential (2017: 4.4M mortgaged properties; 2018: 700K) we should see less overall impact from the 2018 hurricane season than from last year's storms

» Assuming an identical per capita impact as from Harvey and Irma, Michael would result in approximately 6,500 delinquencies, peaking in December 2018

» For context: Harvey and Irma-related delinquencies in the mainland U.S. peaked in November 2017 at 229K – 6X what we would see from this year's storms given a similar per capita impact

WORTH

TERRELL

SEMINOLE

MITCHELL

LEE

GRADYDECATUR

WASHINGTON

DOUGHERTY

FRANKLIN

GADSDEN

CALHOUN

WAKULLA

JACKSONTHOMASHOLMES

LIBERTY

TAYLOR

MILLER

BAKEREARLY

CRISP

LEON

GULF

BAY

Map based on Longitude (generated) and Latitude (generated). Color shows sum of A�ected. The marks are labeled by County. Details are shown for State and County.

Despite the significant damage caused by the storms, Michael and Florence combined affected just 15% the number of homeowners as did Harvey and Irma last year





MORTGAGE MONITOR

SEPTEMBER 2018 | 9

Foreclosure inventory has finally recovered to pre-recession “norms” for the first time since 2006. Here, we take a closer look at recovery levels across the country and explore Q3 foreclosure start activity. This information has been compiled from Black Knight’s McDash loan-level mortgage performance database. You may click on each chart to see its contents in high-resolution.

SEPTEMBER 2018 FORECLOSURE NORMALIZATION

» Total foreclosure starts ended the quarter at 135K, down 2% from Q2 and down 12% from last year

» First-time foreclosure starts saw an even more robust 4% quarterly decline and were down 15% year-over-year

» The 10 lowest quarterly marks for first-time foreclosure starts have all come in the past 2.5 years

» Repeat foreclosure activity held flat in the second quarter while falling 9% from last year

» While the majority of states saw foreclosure starts decline year-over-year, Texas and Florida were among a handful of states where starts rose

» Texas and Florida’s rise was primarily due to hurricane-related effects and an artificially low starting point for the year-over-year comparison as a result of moratoria imposed following the 2017 hurricane season

-

FORECLOSURE STARTS BY QUARTERBoth first-time and total foreclosure starts hit their lowest levels on record (dating back to 2000) in Q3 2018






MORTGAGE MONITOR

SEPTEMBER 2018 | 10

» The number of loans in active foreclosure continues to decline at a rapid pace, with some 90K fewer (-25%) active foreclosure cases from one year ago

» September marks the lowest foreclosure inventory since mid-2006 and the first time since the financial crisis that the number of active foraeclosures has fallen to pre-recession (2000-2005) averages

» Taking into account today’s foreclosure rate and the fact that there are 16% more active mortgages today than the 2000-2005 average, relatively speaking, foreclosure inventory is actually 41K below pre-recession "norms”

» At the current rate of reduction (a six-month average annual decline of 27%) active foreclosure inventory would hit a record low in September 2019, with fewer than 200K cases nationwide

ACTIVE FORECLOSURE INVENTORYAt 0.52%, the national foreclosure rate is now the lowest it's been since mid-2006 and 0.08% below its pre-recession average






MORTGAGE MONITOR

SEPTEMBER 2018 | 11

» Of the 18 states that have yet to fully recover, 11 utilize judicial foreclosures; of these, New York, Florida and New Jersey have a combined 38K excess foreclosure cases remaining compared to pre-recession averages

» Five of the states to hit record lows this year (Indiana, Kentucky, Pennsylvania, South Carolina and Ohio) did so while still having higher foreclosure rates than the national average

» The eastern half of the U.S. accounts for 19 of 24 states with foreclosure rates above the national average

» Colorado's foreclosure rate of 0.11% is one of the lowest ever recorded; the only states to ever post a 0.10% foreclosure rate in recent history were California in 2005 and New Hampshire in 2000

VT+0.62%

+420

RI+0.37%

+490NJ

+0.40%+6,620

NH+0.1 0%

+220

NC-0.31 %-5,370

MD+0.1 8%+2,270

MA+0.30%+2,900

DE+0.09%

+1 80

CT+0.46%+2,61 0

FL+0.38%+1 3,630

NY+0.75%+1 8,580

OH-1 .1 1 %-1 9,690

WY+0.01 %

+1 0

ME+1 .04%+1 ,650

ND+0.21 %

+1 70

NM+0.08%

+250

NV+0.20%+1 ,21 0 VA

+0.01 %+1 80

ID-0.38%-1 ,080

IL-0.20%-4,740

IN-0.75%-7,240KS

-0.22%-760

KY-0.66%-3,900

LA-0.33%-1 ,830

MI-0.36%-5,070

MN-0.1 0%-1 ,260

MO-0.23%-2,31 0

AL-0.27%-1 ,550

MT-0.26%

-420

AR-0.1 4%

-540

NE-0.26%

-800

AZ-0.1 6%-2,390

CA-0.03%-2,440

CO-0.27%-3,31 0

GA-0.22%-3,880

OK-0.20%

-920

OR-0.1 9%-1 ,460

PA-0.28%-4,900

SC-0.69%-5,290

SD-0.06%

-60

TN-0.35%-3,280

TX-0.1 6%-6,020

UT-1 .35%-7,040

IA-0.41 %-1 ,630

WA-0.1 9%-2,550

WI-0.26%-1 ,740

WV-0.44%

-580

MS-0.56%-1 ,230

Map based on Longitude (generated) and Latitude (generated). Color shows sum of Ranking. The marks are labeled by Month, sum of Current Rate Minus Average and sum of Count Di� fromAvg Rate. Details are shown for Month.

State [Postal Abbrev]

FC Rate vs Pre-Recession Average

Foreclosure Inventory vsPre-Recession Average

Label Structure:

Fully recovered to pre-recession average

Hit record low in 2018

Remains above long-term ‘norm’

Foreclosure rates in 32 states have now fully recovered from the financial crisis, with 10 states hitting record lows in 2018






MORTGAGE MONITOR

SEPTEMBER 2018 | 12

Here, we examine the level of refinance incentive in the market and look at how that incentive shifts under varying interest rate scenarios. We also look at the affordability landscape across the country in light of recent rate increases and put it in context with historic benchmarks. This information has been compiled from Black Knight’s Home Price Index and the company’s McDash loan-level mortgage performance database. You may click on each chart to see its contents in high-resolution.

SEPTEMBER 2018 RATE INCREASE IMPACT ANALYSIS

» Rising interest rates continue to impact the refinanceable population – homeowners with mortgages who could likely qualify for and see at least a 0.75% rate reduction from a refinance

» Just 1.86M mortgage holders still have interest rate incentive to refinance, a 56% decrease from the start of the year

» That is the smallest the population has been since 2008

» Note: refinanceable borrowers are current on their mortgages, have credit scores of 720 or higher, at least 20% equity in their homes and would see at least 0.75% rate reduction from refinancing

1,86

4,00

0

M

1M

2M

3M

4M

5M

6M

7M

8M

9M

10M

2001

-04

2001

-08

2001

-12

2002

-04

2002

-08

2002

-12

2003

-04

2003

-08

2003

-12

2004

-04

2004

-08

2004

-12

2005

-04

2005

-08

2005

-12

2006

-04

2006

-08

2006

-12

2007

-04

2007

-08

2007

-12

2008

-04

2008

-08

2008

-12

2009

-05

2009

-09

2010

-01

2010

-05

2010

-09

2011

-01

2011

-05

2011

-09

2012

-01

2012

-05

2012

-09

2013

-01

2013

-05

2013

-09

2014

-01

2014

-05

2014

-09

2015

-01

2015

-05

2015

-09

2016

-01

2016

-05

2016

-09

2017

-01

2017

-05

2017

-09

2018

-01

2018

-05

TOD

AY*

REFINANCE CANDIDATES IN MILLIONSREFINANCE CANDIDATES IN MILLIONSMore than half of homeowners entering the year with incentive to refinance their mortgages have since lost it due to rising interest rates






MORTGAGE MONITOR

SEPTEMBER 2018 | 13

» Here we look at the refinanceable population under various interest rate scenarios

» A rise in rates to 5.5% would cut the number of refinance candidates in half again, leaving fewer than 900K refinance candidates remaining

» Should rates rise to 6%, the refinanceable population would hit a 15-year low

» However, cash-outs are already accounting for nearly four out of five refinances

» A 14% rise in cash-out lending would fully offset a 50% decline in rate/term refinances, meaning we’re likely closer to the bottom of the market than the refinanceable population would suggest

1,864,000

1,547,000(-17%)

1,119,000(-40%)

896,000(-52%)

644,000(-65%) 489,000

(-74%) 533,000

4.85%(Today 11-18)

5.00% 5.25% 5.50% 5.75% 6% 15-Year Low(July 2006)

Interest Rate Scenario

REFINANCE CANDIDATES UNDER VARIOUS INTEREST RATE SCENARIOS

REFINANCE CANDIDATES UNDER VARIOUS INTEREST RATE SCENARIOS






MORTGAGE MONITOR

SEPTEMBER 2018 | 14

< 1 Year49%

1 Year17%

2 Years11%

3 Years6%

4 Years8%

5+ Years9%

YEARS OF REFINANCE INCENTIVE PRIOR TO MISSED OPPORTUNITY

» Surprisingly, most had incentive to refinance for a relatively limited amount of time

» Interest rate incentive is defined as a borrower seeing an at least 0.75 percent rate reduction via refinancing

» Of the 6.5M, nearly half (3.2M) had incentive to refinance for less than 12 months and another 1.1M had incentive for 12-23 months

» The remainder (34%, 2.2M) had incentive to refi for more than two years; 560K of these had incentive for five years and didn’t take advantage

» The average borrower had a 22-month window of refinance opportunity and would have saved $228/month by refinancing

» As a whole, these borrowers tend to carry lower-balance mortgages, with an average balance of $156K, about $42K below the industry average

6.5M homeowners have now missed their window to refinance, resulting in an aggregate missed savings of $1.5B per month


YEARS OF REFINANCE INCENTIVE PRIOR TO MISSED OPPORTUNITY





MORTGAGE MONITOR

SEPTEMBER 2018 | 15

201834%

201722%

201635%

Pre 20169%

YEAR REFINANCE INCENTIVE WAS LOST

201413%

201113%

201015%

200912%

Other Post 2009

30%

Pre-200917%

VINTAGE OF BORROWERS THAT MISSED REFINANCE INCENTIVE


VINTAGE OF BORROWERS THATMISSED REFINANCE INCENTIVE

YEAR REFINANCE INCENTIVE WAS LOST

» Most borrowers who missed their window to take advantage of interest rate incentive to refinance had taken out their mortgages during/following the financial crisis

» In fact, over 80% were in 2009 or later vintage mortgages, with 40% taking out their mortgage from 2009-2011

» This heavy post-recession distribution reflects the fact that those in pre-recession vintages with the necessary equity and credit quality to qualify still have rate incentive to refinance today

» Interest rate incentive to refinance has been primarily declining since 2016, with 2.3M borrowers losing their incentive in that year alone

» Another 1.4M lost incentive last year, and 2.2M more have lost it so far in 2018






MORTGAGE MONITOR

SEPTEMBER 2018 | 16


» The monthly principal and interest payment needed to purchase the average-priced home has seen a $190 per month increase since the beginning of 2018, an 18% jump.

» Despite the recent tightening, housing on average across the U.S. remains more affordable than the long term benchmark (1995–2003) of 25.1%

» Even if home prices were to stay flat, another 0.50% increase in interest rates would make homes less affordable than long-term norms

» That said, home price appreciation does continue to slow, with prices rising just 0.05% in August, roughly one-third of the 25-year average for the month, with early indicators pointing to a slight decline in September

» As rates were relatively flat from June through August, this represents a continued reaction to the tightening affordability that took place early in 2018, and not the most recent jump in rates

34.5%

23.6%

4.86%

2.5%

4.0%

5.5%

7.0%

8.5%

5%

10%

15%

20%

25%

30%

35%

40%

1996-1

0

1997-1

0

1998-1

0

1999-1

0

2000-1

0

2001-1

0

2002-1

0

2003-1

0

2004-1

0

2005-1

0

2006-1

0

2007-1

0

2008-1

0

2009-1

0

2010-1

0

2011-1

0

2012-1

0

2013-1

0

2014-1

0

2015-1

0

2016-1

0

2017-1

0

2018-1

0

Fred

die

30-Y

ear F

ixed

Rat

e

Paym

ent t

o In

com

e Ra

tio

NATIONAL PAYMENT TO INCOME RATIO*Payment to Income Ratio (left Axis) Freddie 30-Year Fixed Interest Rate (right axis)

*The National Payment to Income Ratio is the share of median income needed to make the monthly principal and interest payment on the purchase of the average-priced home using a 20% down 30-year fixed rate mortgage at the prevailing interest rate

NATIONAL PAYMENT TO INCOME RATIO*It now takes 23.6% of median income to make the monthly payment on the average-priced home, making housing the least affordable it’s been in nearly a decade





MORTGAGE MONITOR

SEPTEMBER 2018 | 17


» This marks the least affordable housing has been in California in more than a decade

» Even more noteworthy is the increasing delta between affordability today and California's own long-term averages

» It currently requires 7.5% more of the median income to purchase the average-priced California home today (39.3% vs. 31.8%) than it did from 1995-2003

» While that payment-to-income ratio is still far more affordable than the 59% peak in 2006, symptoms of California's tight affordability environment appear to be emerging

» The most affordable areas of the country remain the Midwest and portions of the southeast, with the majority of the country still affordable by its own historic standards, but rising interest rates have been causing the scale to tip

18%

18%21%

39%

25%

19%

35%

24%

19%

15%

22%

18% 14%23%

17%

24%

33%

16%

19%

17%

26%

25%

23%

22%

17%

19%

23%

23%

26%

31%

13%

16%

27%

18%

28%

1 8%

21%

23%

26%

16%

28%

23%

1 3% 39%

201 8-1 0

Map based on Longit ude ( generat ed) and Lat it ude ( generat ed) . Color shows sum of 201 8-1 0. The marks are labeled by sum of 201 8-1 0. Det ails are shown for Row Labels.

SHARE OF MEDIAN INCOME NEEDED TO PURCHASE AVERAGE HOMESHARE OF MEDIAN INCOME NEEDED TO PURCHASE AVERAGE HOMECalifornia is the least affordable state in which to live, requiring 39% of the median income in the state to purchase the average-priced home





MORTGAGE MONITOR

SEPTEMBER 2018 | 18

» At the start of 2018, just two states – California and Hawaii – were less affordable than their long-term norms

» As of today, 10 states have passed those benchmarks and another six are within 1.0% of long-term affordability levels

» Hawaii is the least affordable state compared to long-term norms, requiring nearly 8% more of median income to make the payment on the average home than long-term averages

» Home price growth in Hawaii has slowed from 4.5% in February to 3% as of August, now well below the national average

» California, least affordable overall and second least affordable compared to its own long term averages, has seen noticeable home price reaction, with its annual rate of appreciation dropping from 10.2% to 6.8% over the past six months

» The average California home has now dropped in value for three consecutive months and is down 1.3% ($7,200) for the quarter, the first quarterly decline in home prices there since the housing recovery began in 2012

-6.6%

+1.7% +0.7%

+3.0%

+2.6%

+7.5%

+2.4%

+1.2%+0.1%

+0.2%

-1 .2%

-5.4%

-6.3%

-1.7%

-7.5%-4.1%

-4.9%

-0.7%

-5.9%

-1.8%

-3.2%

-8.5%

-2.2%

-2.7%

-0.3%

-3.5%

-1.2%

-0.8%

-5.1%

-7.9%

-7.5%-8.2%

-3.7%

-4.0%

-3.2%

-6.4%

-2.5%

-1.0% -0.2%

-3.7%

-2.0% +2.0%

Di� vs. Benchmark

Map based on Longit ude ( generat ed) and Lat it ude ( generat ed) . Color shows sum of Di� vs. Benchmark. The marks are labeled by sum of Di� vs. Benchmark. Det ails are shown for Row Labels.

TODAY VS. 1995 – 2003 AVERAGETODAY VS. 1995 – 2003 AVERAGE7 of the 10 states that are now less affordable than long-term averages have seen their rate of home price growth slow over the past six months






MORTGAGE MONITOR

SEPTEMBER 2018 | 19

SEPTEMBER 2018 APPENDIX

Summary Statistics

Sep-18 Monthly Change

YTD Change

Yearly Change

Delinquencies 3.97% 13.22% -7.84% -9.77%

Foreclosure 0.52% -4.45% -21.03% -26.00%

Foreclosure Starts 40,000 -15.07% -35.79% -11.50%

Seriously Delinquent (90+) or in Foreclosure 1.51% -0.72% -25.83% -17.40%

New Originations (data as of Aug-18) 558K 0.3% 0.6% -14.2%

Sep-18 Aug-18 Jul-18 Jun-18 May-18 Apr-18 Mar-18 Feb-18 Jan-18 Dec-17 Nov-17 Oct-17 Sep-17Delinquencies 3.97% 3.50% 3.61% 3.74% 3.64% 3.67% 3.73% 4.30% 4.31% 4.71% 4.55% 4.44% 4.40%

Foreclosure 0.52% 0.54% 0.57% 0.56% 0.59% 0.61% 0.63% 0.65% 0.66% 0.65% 0.66% 0.68% 0.70%Foreclosure Starts 40,000 47,100 48,300 43,500 44,900 49,300 52,100 46,700 62,300 44,500 47,800 50,200 45,200

Seriously Delinquent (90+) or in Foreclosure 1.51% 1.52% 1.59% 1.63% 1.70% 1.78% 1.86% 2.01% 2.04% 2.06% 1.97% 1.84% 1.83%

New Originations 558K 556K 596K 589K 535K 540K 436K 452K 554K 554K 606K 586K

4.40

%

4.44

%

4.55

%

4.71

%

4.31

%

4.30

%

3.73

%

3.67

%

3.64

%

3.74

%

3.61

%

3.50

%

3.97

%

Sep-17

Oct-17

Nov-17

Dec-17

Jan-1

8

Feb-18

Mar-18

Apr-18

May-18

Jun-1

8Ju

l-18

Aug-18

Sep-18

TOTAL DELINQUENCIES

586K

606K

554K

554K

452K

436K 54

0K

535K

589K

596K

556K

558K

Sep-17

Oct-17

Nov-17

Dec-17

Jan-1

8

Feb-18

Mar-18

Apr-18

May-18

Jun-1

8Ju

l-18

Aug-18

NEW ORIGINATIONS

SEPTEMBER 2018 DATA SUMMARY





MORTGAGE MONITOR

SEPTEMBER 2018 | 20

MonthTOTAL ACTIVE COUNT

30 DAYS 60 DAYS 90+ DAYS FCTotal

Non-Current FC Starts

Average Days

Delinquent for 90+

Average Days

Delinquent for FC

Ratio of 90+ to FC

1/31/05 47,706,128 1,197,062 339,920 458,719 276,745 2,272,446 50,922 242 324 165.8%1/31/06 50,900,620 1,242,434 387,907 542,378 258,613 2,431,332 76,477 207 308 209.7%1/31/07 53,900,458 1,425,030 468,441 551,439 393,973 2,838,883 117,419 203 267 140.0%1/31/08 55,478,782 1,743,420 676,266 950,639 813,560 4,183,885 195,033 190 256 116.8%1/31/09 55,788,441 2,001,314 932,436 1,878,981 1,321,029 6,133,760 250,621 193 323 142.2%1/31/10 55,098,009 1,945,589 903,778 2,972,983 2,068,572 7,890,922 292,308 253 418 143.7%1/31/11 53,861,778 1,750,601 746,634 2,078,130 2,245,250 6,820,615 277,374 333 527 92.6%1/31/12 52,687,781 1,592,463 652,524 1,796,698 2,205,818 6,247,503 223,394 395 666 81.5%1/31/13 51,229,692 1,464,583 587,661 1,551,415 1,742,689 5,346,348 156,654 460 803 89.0%1/31/14 50,380,779 1,341,074 529,524 1,278,955 1,213,046 4,362,599 97,467 486 935 105.4%1/31/15 50,412,744 1,238,453 465,849 1,060,002 884,901 3,649,204 93,280 509 1031 119.8%1/31/16 50,541,353 1,298,682 444,594 831,284 659,237 3,233,797 71,900 495 1047 126.1%1/31/17 50,871,357 1,108,712 389,768 663,521 480,598 2,642,599 70,357 454 1013 138.1%1/31/18 51,155,753 1,083,162 412,676 706,623 336,613 2,539,074 62,312 364 932 209.9%2/28/18 51,154,575 1,114,486 386,518 696,802 330,505 2,528,312 46,720 367 930 210.8%3/31/18 51,282,283 942,600 336,892 632,157 320,686 2,232,335 52,094 388 928 197.1%4/30/18 51,378,198 960,902 325,538 598,191 314,016 2,198,647 49,280 395 929 190.5%5/31/18 51,338,774 970,417 328,860 568,110 303,412 2,170,799 44,866 401 937 187.2%6/30/18 51,520,891 1,040,477 335,991 548,366 290,744 2,215,577 43,454 404 935 188.6%7/31/18 51,545,452 991,310 342,054 527,919 292,999 2,154,282 48,263 406 925 180.2%8/31/18 51,607,496 967,665 335,317 505,598 280,660 2,089,240 47,081 417 912 180.1%9/30/18 51,636,125 1,170,068 366,120 512,681 268,332 2,317,201 40,001 399 905 191.1%

LOAN COUNTS AND AVERAGE DAYS DELINQUENT






MORTGAGE MONITOR

SEPTEMBER 2018 | 21

STATE-BY-STATE RANKINGS BY NON-CURRENT LOAN POPULATION

State Del % FC % Non-Curr %

Year/Year Change in NC% State Del % FC % NC % Year/Year

Change in NC% State Del % FC % NC % Year/Year Change in NC%

National 4.0% 0.5% 4.5% -12.0% National 4.0% 0.5% 4.5% -12.0% National 4.0% 0.5% 4.5% -12.0%MS 9.7% 0.6% 10.3% -4.5% OH* 4.6% 0.7% 5.3% -6.2% WI* 3.5% 0.5% 4.0% -8.3%LA* 7.3% 0.9% 8.2% -13.5% NJ* 4.3% 1.0% 5.3% -17.6% VA 3.6% 0.2% 3.8% -3.0%AL 6.8% 0.4% 7.1% -5.2% NC 4.9% 0.3% 5.2% 1.4% AK 3.3% 0.4% 3.6% 1.1%WV 6.2% 0.6% 6.8% -5.7% TN 4.9% 0.2% 5.2% -12.3% WY 3.2% 0.3% 3.5% -11.8%AR 5.9% 0.4% 6.3% -2.6% FL* 4.1% 0.9% 5.0% -34.3% NV 2.8% 0.6% 3.4% -13.5%IN* 5.5% 0.8% 6.3% -4.3% KS* 4.6% 0.4% 5.0% -2.0% DC 2.5% 0.6% 3.1% -18.3%OK* 5.3% 0.8% 6.1% -4.7% VT* 3.9% 1.0% 5.0% -0.8% AZ 2.9% 0.2% 3.1% -4.5%ME* 4.3% 1.6% 5.9% -9.2% NM* 4.0% 0.9% 4.9% -10.6% SD* 2.5% 0.4% 2.9% -1.5%PA* 5.1% 0.7% 5.8% -8.1% KY* 4.2% 0.6% 4.7% -6.7% UT 2.7% 0.2% 2.8% -13.9%RI 5.1% 0.6% 5.8% -9.9% IL* 4.0% 0.7% 4.7% -6.9% MN 2.6% 0.2% 2.8% 4.5%SC* 5.2% 0.6% 5.8% -3.2% HI* 3.1% 1.5% 4.6% -7.8% MT 2.4% 0.3% 2.7% -1.9%NY* 4.2% 1.6% 5.8% -12.7% MO 4.3% 0.3% 4.6% -5.4% CA 2.4% 0.2% 2.5% -10.2%DE* 4.9% 0.8% 5.7% -6.2% MA 4.0% 0.5% 4.5% -7.7% ND* 2.0% 0.5% 2.5% 3.1%GA 5.3% 0.3% 5.7% -7.7% MI 4.2% 0.2% 4.3% -4.7% ID 2.2% 0.2% 2.5% -11.1%CT* 4.7% 0.9% 5.6% -7.0% IA* 3.7% 0.5% 4.2% 0.8% WA 2.2% 0.3% 2.5% -10.8%MD* 5.0% 0.6% 5.6% -5.0% NH 3.8% 0.3% 4.1% -1.9% OR 1.9% 0.3% 2.2% -13.9%TX 5.0% 0.4% 5.4% -26.3% NE* 3.8% 0.2% 4.1% 12.7% CO 1.9% 0.1% 2.0% -8.3%

* - Indicates Judicial State






MORTGAGE MONITOR

SEPTEMBER 2018 | 22

http://www.blackknightinc.com/wp-content/uploads/2018/09/BKI_MM-Disclosures.pdf

You can reach us by email [email protected]

Follow us on Twitter@Black_KnightInc






mailto:MortgageMonitor%40bkfs.com%20?subject=

https://twitter.com/black_knightinc?lang=en

Date post:	14-Jul-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

MORTGAGE MONITOR - Black Knight, Inc. · This month, as always, we begin with a review of some of...

Documents