As the economy improved, tax returns came in, and homeowners received stimulus payments, the mortgage default rate fell, according to Black Knight.
March is usually one of the best months for homeowners to catch up on their mortgage payments as bonuses and tax returns come in. That month, however, many families were also hit by stimulus payments and the crime rate fell.
According to the latest Black Knight, the mortgage default rate fell 16.4 percent from 6 percent in February to 5.02 percent in March First look data report. For comparison: in the last 20 years, the arrears in March have decreased by an average of 10 percent.
A Black Knight spokesman also pointed out that months after those that end on Sundays tend to see big improvements. This year, both January and February ended on Sundays, setting the stage for a bigger than usual comeback for the calendar-hit arrears.
Despite this strong performance, around 1.9 million borrowers – including those with Active Forbearance – remain at least 90 days past due for payments. That’s nearly 1.5 million more than at this point last year and 500 percent more than before the pandemic.
The Federal Housing Agency (FHFA) announced Wednesday that Fannie Mae and Freddie Mac will extend a temporary loan one last time until the end of May as the use of that flexibility continues to decline.
Due to widespread forbearance programs, these borrowers will not be put into foreclosure. The number of loans in active foreclosures fell to another record low in March, the Black Knight report showed.
And those foreclosures could remain at record lows for the remainder of 2021. The Consumer Financial Protection Bureau (CFPB) recently approved suggested a rule that would take foreclosures off the table for all mortgage servants by 2022.
Mortgage indulgence continues to pull back from last summer’s highs, but it’s still around 2.3 million homeowners take a break of their monthly mortgage payments according to the latest figures from the Mortgage Bankers Association (MBA).
Prepayments rose 17 percent in March to their highest level in more than 17 years. The jump was due to a seasonal surge in home sales and a surge in refinancing activity that was evident before interest rates began to rise in mid-February.
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