Mortgage Monitor July 2014

Black Knight Financial Services TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, or an affiliate.©

2014 BKIS, LLC. All Rights Reserved.

Black Knight Mortgage

Monitor

Mortgage Market Performance Observations Data as of July, 2014 Month-end

2 Black Knight Financial Services

TM SM ® Trademark(s) of Black Knight IP Holding Company, LLC, or an affiliate.©


Focus Points

• Distressed inventory overview:

• New non-current loans

• 90+ inventory

• Home Retention activity

• State view

• Originations

• Purchase vs refinance

• Home Equity update

• Trends in delinquencies

• Originations and reset shock




First Look July 2014 – still more than 1.1m properties in

90+ delinquency

Jul-14

Month-over-

month change

Year-over-

year change

5.64% -1.13% -12.07%

1.85% -1.65% -34.44%

90,700 2.72% -19.59%

1.05% 10.24% -41.01%

1.85% 7.09% -9.95%

2,849,000 -34,000 -344,000

1,136,000 -19,000 -211,000

935,000 -16,000 -471,000

3,785,000 -49,000 -814,000

12 Month

Trend

Total U.S. loan delinquency rate (loans 30 or more days past due, but

not in foreclosure):

Total U.S. foreclosure pre-sale inventory rate:

Total U.S. foreclosure starts:

Monthly Prepayment Rate (SMM):

Foreclosure Sales as % of 90+:

Number of properties that are 30 or more days past due, but not in

foreclosure:

Number of properties that are 90 or more days past due, but not in

foreclosure:

Number of properties in foreclosure pre-sale inventory:

Number of properties that are 30 or more days past due or in

foreclosure:




Delinquencies and Foreclosures continue to decline




New problem loans are back to 2005-2006 levels




Rolls into a more delinquent status – have been

improving




90 Day Defaults have increased 4 months in a row

July 2014:

53% of foreclosure starts are repeats

79% are 2008 or prior originations

74% of 90 day defaults are

2008 or prior originations




80% of total 90+ delinquent inventory is from 2008 or

older vintages




Home retention actions slowed down as distressed

inventory declined




Still a lot of activity relative to the distressed inventory




Home retention activity does not always correlate

with amount of distressed inventory

State

90+ and FC inventory

as of 1/31/2014

Home Retention Actions

as percentage of 90+ and

FC (first 6 months of 2014)

Top 20 for Home

Retention Activity?

FL 363,093 5.9% NO

NY 213,665 6.0% NO

CA 181,229 11.6% YES

NJ 168,389 5.2% NO

IL 128,200 7.7% NO

TX 123,831 10.3% YES

PA 95,942 8.4% NO

OH 88,979 8.2% NO

GA 83,526 10.0% YES

MD 81,767 8.9% NO

NC 65,017 10.2% YES

WA 57,272 7.3% NO

IN 51,151 9.3% YES

MA 49,057 8.3% NO

MI 47,077 10.1% YES

VA 44,895 10.4% YES

TN 42,806 8.4% NO

NV 38,426 6.0% NO

CT 37,472 8.8% NO

SC 36,879 9.4% YES




Retention actions have not dropped in judicial

states




…but CA is higher




Originations dropped slightly in June




Refinance share – 32%, Aug 2008 was 35%




Share of jumbo loans just under 9% in 2014




Interest rates on jumbo loans continue to be lower than

non-GSE loans




Some loosening of LTV requirements since 2009




Home Equity products delinquencies improving




New Non-current loans at multi-year lows similar to

First Lien mortgage




2014 HELOC Originations up 18% Y/Y.

NV, MI, RI, FL among those with largest increase




HELOCs payment shock still a concern




BKFS Mortgage Monitor Appendix

Data as of July, 2014 Month-end




June2014 Data Summary

July Summary Statistics

Jul-14

Monthly

Change

YTD

Change

Yearly

Change

Delinquencies 5.64% -1.13% -12.76% -12.07%

Foreclosure 1.85% -1.65% -25.36% -34.44%

Foreclosure Starts 90,690 2.69% -13.43% -19.64%

Seriously Delinquent (90+) or

in Foreclosure 4.10% -1.64% -18.53% -25.86%

New Originations (data as of

Jun-14) 466K -3.6% 37.8% -40.0%

12 Month History

Jul-14 Jun-14 May-14 Apr-14 Mar-14 Feb-14 Jan-14 Dec-13 Nov-13 Oct-13 Sep-13 Aug-13 Jul-13

Delinquencies 5.64% 5.70% 5.62% 5.62% 5.52% 5.97% 6.27% 6.47% 6.45% 6.28% 6.46% 6.20% 6.41%

Foreclosure 1.85% 1.88% 1.91% 2.02% 2.13% 2.22% 2.35% 2.48% 2.50% 2.54% 2.63% 2.66% 2.82%

Foreclosure Starts 90,690 88,314 86,258 78,796 88,113 91,993 94,075 104,759 104,939 118,837 108,953 107,552 112,849

Seriously Delinquent (90+) or

in Foreclosure 4.10% 4.17% 4.22% 4.39% 4.52% 4.70% 4.92% 5.03% 5.05% 5.10% 5.26% 5.22% 5.53%

New Originations 466K 483K 445K 412K 338K 357K 452K 439K 493K 510K 649K 743K

6.41

%

6.2

0%

6.4

6%

6.2

8%

6.45

%

6.47

%

6.27

%

5.97

%

5.52

%

5.62

%

5.62

%

5.70

%

5.64

%

Total Delinquencies

743K

64

9K

510K

49

3K

439K

452K

357K

338K 41

2K

445K

483K

46

6K

New Originations




Six of the top 10 states for total non-current are

judicial

State Del % FC % Non-

Curr %

Yr/Yr

Change

in NC%


Curr %

Yr/Yr

Change

in NC%


Curr %

Yr/Yr

Change

in NC%

National 5.6% 1.9% 7.5% -18.9% National 5.6% 1.9% 7.5% -18.9% National 5.6% 1.9% 7.5% -18.9%

MS 12.5% 1.7% 14.2% -5.6% GA 7.4% 1.0% 8.5% -15.5% KS * 5.5% 1.0% 6.6% -9.3%

NJ * 6.3% 6.1% 12.4% -16.7% SC * 6.5% 1.9% 8.4% -13.4% IA * 4.5% 1.5% 5.9% -15.4%

FL * 6.1% 4.8% 10.9% -31.8% IL * 5.6% 2.6% 8.2% -24.7% WA 4.0% 1.6% 5.6% -23.6%

LA * 9.1% 1.7% 10.9% -5.4% MA 6.8% 1.4% 8.1% -13.1% OR 3.6% 2.0% 5.6% -19.6%

NY * 6.2% 4.6% 10.8% -15.0% HI * 4.0% 4.1% 8.1% -21.6% UT 4.7% 0.8% 5.5% -16.2%

ME * 6.5% 3.8% 10.3% -14.2% NV 5.9% 2.2% 8.1% -32.5% VA 4.7% 0.6% 5.3% -12.7%

RI 7.8% 2.4% 10.2% -13.9% OK * 6.0% 2.1% 8.1% -10.8% NE * 4.4% 0.6% 5.0% -11.8%

AL 9.0% 1.0% 10.0% -5.0% KY * 5.9% 1.6% 7.4% -12.5% ID 3.6% 1.2% 4.8% -25.4%

IN * 7.4% 1.9% 9.3% -12.7% NC 6.4% 1.0% 7.3% -14.7% AZ 3.9% 0.6% 4.5% -19.4%

WV 8.0% 1.1% 9.1% -5.1% NM * 5.1% 2.3% 7.3% -11.2% CA 3.7% 0.7% 4.4% -28.6%

AR 7.7% 1.5% 9.1% -10.8% TX 6.4% 0.7% 7.1% -11.0% WY 3.8% 0.5% 4.3% -3.9%

PA * 6.8% 2.3% 9.1% -12.5% VT * 4.7% 2.4% 7.0% -17.3% MN 3.5% 0.6% 4.1% -16.2%

CT * 6.1% 3.0% 9.1% -19.5% MO 6.1% 0.8% 6.9% -11.2% AK 3.5% 0.5% 4.1% -8.3%

DE * 6.7% 2.2% 9.0% -14.8% WI * 5.4% 1.4% 6.8% -16.6% MT 3.1% 0.9% 3.9% -13.1%

MD * 6.6% 2.4% 8.9% -21.3% MI 5.8% 0.8% 6.6% -15.4% CO 3.2% 0.5% 3.8% -18.8%

TN 7.9% 0.9% 8.8% -9.6% NH 5.6% 1.1% 6.6% -11.6% SD * 2.9% 0.7% 3.6% -12.5%

OH * 6.7% 2.1% 8.7% -16.6% DC 4.5% 2.0% 6.6% -19.0% ND * 1.9% 0.6% 2.6% -16.2%

* - Indicates Judicial State




Loan counts and

average days delinquent

Month

TOTAL

ACTIVE

COUNT 30 DAYS 60 DAYS 90+ DAYS FC

Total Non-

Current FC Starts

Average Days

Delinquent for

90+

Average Days

Delinquent for

FC

Ratio of

90+ to FC

1/31/2008 54,094,282 1,701,163 664,956 940,832 817,948 4,124,899 197,210 189 255 115.0%

1/31/2009 54,267,187 1,945,997 909,744 1,817,809 1,318,840 5,992,391 249,655 191 321 137.8%

1/31/2011 52,138,710 1,682,266 715,350 1,988,781 2,162,601 6,548,999 261,272 332 528 92.0%

1/31/2012 51,111,780 1,531,458 627,874 1,758,894 2,163,659 6,081,884 219,750 397 668 81.3%

1/31/2013 49,896,142 1,407,343 567,022 1,531,216 1,702,715 5,208,297 147,593 468 814 89.9%

2/28/2013 50,123,564 1,400,311 526,649 1,483,423 1,693,699 5,104,081 131,826 473 824 87.6%

3/31/2013 50,186,364 1,346,310 495,352 1,465,953 1,688,809 4,996,424 121,012 492 834 86.8%

4/30/2013 50,117,188 1,252,302 464,676 1,394,132 1,588,138 4,699,249 127,496 503 843 87.8%

5/31/2013 50,076,535 1,243,193 465,129 1,334,699 1,524,837 4,567,859 116,812 511 852 87.5%

6/30/2013 49,823,992 1,471,134 511,731 1,344,818 1,457,699 4,785,382 109,042 512 860 92.3%

7/31/2013 49,784,184 1,335,498 510,585 1,347,161 1,406,121 4,599,365 112,849 517 876 95.8%

8/31/2013 50,370,772 1,344,657 491,283 1,287,867 1,340,955 4,464,763 107,552 505 895 96.0%

9/30/2013 50,521,857 1,397,119 537,260 1,331,344 1,327,608 4,593,332 108,953 513 895 100.3%

10/31/2013 50,161,457 1,345,175 523,729 1,282,783 1,275,579 4,427,266 118,837 512 900 100.6%

11/30/2013 50,264,345 1,424,197 534,167 1,282,938 1,256,170 4,497,471 104,939 500 905 102.1%

12/31/2013 50,163,956 1,411,348 551,473 1,280,336 1,244,436 4,487,591 104,759 490 920 102.9%

1/31/2014 50,044,899 1,318,673 532,548 1,288,573 1,175,470 4,315,263 94,075 481 943 109.6%

2/28/2014 50,118,665 1,267,410 482,140 1,241,878 1,114,985 4,106,413 91,993 481 956 111.4%

3/31/2014 50,211,856 1,135,658 435,521 1,198,907 1,069,791 3,839,877 88,113 496 966 112.1%

4/30/2014 50,211,885 1,197,193 436,813 1,187,019 1,016,287 3,837,312 78,796 495 985 116.8%

5/31/2014 50,541,174 1,222,390 447,930 1,168,971 966,062 3,805,353 86,258 501 993 121.0%

6/30/2014 50,530,807 1,261,502 466,039 1,155,114 951,384 3,834,039 88,314 502 997 121.4%

7/31/2014 50,521,130 1,239,298 473,983 1,136,139 935,460 3,784,879 90,690 501 1,001 121.5%




BKFS Mortgage Monitor

Disclosures: Product / Metric Definitions and

Market Sizing




Disclosure Page: Product Definitions

*Conforming limits do not account for temporary or high-cost area increases.




Disclosure Page: Metrics Definitions

• Total Active Count: All active loans as of month-end including loans in any state of delinquency or foreclosure. Post-sale loans and loans in REO are excluded from the total active count.

• Delinquency Statuses (30, 60, 90+, etc): All delinquency statuses are calculated using the MBA methodology based on the payment due date provided by the servicer. Loans in foreclosure are reported separately and are not included in the MBA days delinquent.

• 90 Day Defaults: Loans that were less than 90 days delinquent in the prior month and were 90 days delinquent, but not in foreclosure, in the current month.

• Foreclosure Inventory: The servicer has referred the loan to an attorney for foreclosure. Loans remain in foreclosure inventory from referral to sale.

• Foreclosure Starts – Any active loan that was not in foreclosure in the prior month that moves into foreclosure inventory in the current month.

• Non-Current: Loans in any stage of delinquency or foreclosure.

• Foreclosure Sale / New REO: Any loan that was in foreclosure in the prior month that moves into post-sale status or is flagged as a foreclosure liquidation.

• REO: The loan is in post-sale foreclosure status. Listing status is not a consideration, this includes all properties on and off the market.

• Deterioration Ratio: The ratio of the percentage of loans deteriorating in delinquency status vs. those improving.




Disclosure Page: Extrapolation Methodology

Mortgage statistics are scaled to estimate the total market performance based on coverage within the McDash database.

The following table contains information on market coverage by product as of June 2012; extrapolations also include adjustments for vintage and as of date. Additional information is available upon request.

Mortgage Monitor July 2014

Real Estate

Transcript of Mortgage Monitor July 2014