Black Knight's March Mortgage Monitor: Negative Equity Population Shrinks to Just Over 4 Million; 77 Percent of Borrowers in Foreclosure Are Underwater

JACKSONVILLE, Fla., May 4, 2015 /PRNewswire/ --

• Number of underwater borrowers decreased by 1.6 million from this time last year
• 77 percent of borrowers in foreclosure are underwater; 72 percent of those 90 or more days past due are underwater
• Higher-end properties (top 20 percent in home prices) largely escape negative equity positions
• Nevada and Florida lead nation in negative equity rate; Florida and California have highest number of properties underwater

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 March 2015. Leveraging the Black Knight Home Price Index, which separately values both distressed and non-distressed properties, and the company's industry-leading loan-level mortgage performance database, Black Knight analyzed the latest available data on the nation's negative equity situation. As explained by Ben Graboske, senior vice president, Black Knight Data and Analytics, the trend remains one of overall improvement -- though negative equity distribution varies considerably depending upon geographical location and home values within a given market.

"While there are many publicly released estimates on negative equity, Black Knight has a unique perspective on the issue," said Graboske. "We not only have the benefit of knowing current unpaid balances on millions of first lien mortgages every month through our industry-leading McDash database, but we're also able to separately and distinctly value distressed and non-distressed properties down to the ZIP code level through the Black Knight Home Price Index. This provides increased accuracy in attempting to determine equity positions, especially in heavily distressed communities. Our most recent data shows that just over 8 percent of borrowers are currently underwater on their mortgages, representing a nearly 30 percent reduction in the negative equity rate since last year. 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.

"We drilled down to take a closer look at how this was playing out geographically and among different property price tiers. Nevada and Florida continue to see the nation's highest negative equity rates, with 16.4 and 15.1 percent of borrowers being underwater in those states, respectively. In terms of price tiers, we found that the bottom 20 percent of homes by price continue to struggle with negative equity, while negative equity rates on high-end homes -- the top 20 percent by price -- are limited, even in the hardest hit states. In fact, when reviewing at the state level, borrowers in the bottom 20 percent of homes by price are nine times more likely to be underwater on their mortgages than those in the top 20 percent."

This month's Mortgage Monitor also looked at March's drop in mortgage delinquency rate, and found that while seasonal decreases in March are typical -- they have been seen in each of the past 10 years -- the 12.2 percent drop seen this year was the largest monthly decline in nine years. In addition, declines were seen across all stages of delinquency (30, 60, 90 and 120+ 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. 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. Roll rates from 30-to-60 and 60-to-90 days delinquent hit their lowest levels since March 2006. Finally, 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 2000-2005 average of 40.4 percent.

As was reported in Black Knight's most recent First Look release, other key results include:

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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