Mortgage Monitor March 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 March, 2014 Month-end

2 Black Knight Financial Services

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


Focus Points

• March 2014 performance update – delinquencies and

foreclosures

– Regional trends, HPI, active population

characteristics

• Extended foreclosure timelines

• Originations

– HARP, jumbo trends, originations characteristics,

recent performance

• Affordability




March data “First Look”

Mar-14

Month-over-

month change

Year-over-

year change

5.52% -7.57% -16.29%

2.13% -4.23% -36.69%

88,100 -4.24% -27.19%

0.80% 20.84% -57.67%

1.83% 9.15% -6.37%

2,770,000 -221,000 -538,000

1,199,000 -43,000 -267,000

1,070,000 -45,000 -619,000

3,840,000 -266,000 -1,156,000

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:

Monthly Prepayment Rate (SMM):

Foreclosure Sales as % of 90+:

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:




Seasonal trend – March 2014 biggest drop in

delinquencies in three years




Delinquencies and Foreclosures continue

decline

Delinquency % - lowest since October 2007 (5.37%) Foreclosure % - lowest since October 2008 (2.07%)




Leading Indicators have been pointing to

improvement




From 2005 to 2009 the crisis spread nationwide,

impacting all regions

Non-Current Rates: January 2005

Non-Current Rates: January 2010




The State of the Union today: National

improvement, but some trouble spots remain




Non-judicial states have experienced greater

improvement

Non-Judicial: Down 53.9% from Peak

Judicial: Down 38.5% from Peak




Change in Non-Current % correlates with

change in HPI




Negative Equity is on decline, clear difference

between judicial vs. non-judicial




Equity and Credit Standards improved since

2010

Jan 2010

Jan 2014

Credit Score/

CLTV<620 620-659 660-699 700-739 740-779 780+ Total

1-60 1% 1% 2% 3% 5% 8% 20%

61-80 1% 1% 3% 4% 5% 6% 20%

81-100 3% 3% 4% 5% 6% 5% 26%

101-120 2% 2% 3% 3% 3% 2% 15%

121-150 2% 1% 2% 2% 2% 1% 9%

150+ 3% 2% 2% 2% 1% 1% 10%

Total 11% 10% 16% 19% 23% 22% 100%

Credit Score/

CLTV<620 620-659 660-699 700-739 740-779 780+ Total

1-60 1% 2% 3% 4% 7% 14% 31%

61-80 2% 2% 4% 6% 8% 10% 32%

81-100 3% 4% 5% 5% 5% 4% 27%

101-120 1% 1% 1% 1% 1% 1% 6%

121-150 1% 1% 1% 0% 0% 0% 3%

150+ 1% 0% 0% 0% 0% 0% 2%

Total 9% 10% 14% 17% 22% 29% 100%

Negative Equity 34%

Negative Equity 10%

48%

35%




Days in Delinquency for Foreclosure

Inventories continues to go up




Foreclosure Sales for aged inventory are

highest in count




…but low by percentage of inventory




Aged Foreclosures % at all time high




Originations at the lowest level in over 10 years

Almost 13% are investor (non-owner occupied) properties




High LTV GSE originations (HARP and

Streamlines) dropped sharply since mid-2013

HARP volume was down 70% year

over year*

Over 6M Total HARP and GSE streamline since

April 2009*

*FHFA Refinance Report – Nov 13




The government share of originations has

decreased

Private

Portfolio

GSE

FHA / VA

Vintage Gov’t %

2009 91%

2010 89%

2011 87%

2012 84%

2013 83%




Towards the end of 2013 jumbo loans

represented over 9% of total originations

Weighted Credit Score

Jumbo 765

Non-Jumbo 750




Jumbo Rates more attractive than non-jumbo




Underwriting criteria is still very strict

compared to pre-bubble vintages

Cre

dit

Sco

re A

t O

rigi

nat

ion




As a result, 2013 is the best performing

vintage on record

Tota

l Del

inq

uen

cy a

t 6

th P

aym

ent

LTV<80%, Credit Score>=720




Payment to Income ratio still below pre-crisis

levels overall, but varies by state




In 2006 only 4 states were below most recent

index of 22% - IN, NE, IA, OH




NY and CA are the least affordable states

currently




BKFS Mortgage Monitor Appendix

Data as of March, 2014 Month-end




March 2014 Data Summary

March Summary Statistics

Mar-14

Monthly

Change

YTD

Change

Yearly

Change

Delinquencies 5.52% -7.57% -14.67% -16.29%

Foreclosure 2.13% -4.23% -14.12% -36.69%

Foreclosure Starts 88,113 -4.22% -15.89% -27.19%

Seriously Delinquent (90+) or

in Foreclosure 4.52% -3.92% -10.23% -28.12%

New Originations (data as of

Feb-14) 238K -33.5% -52.5% -66.8%

12 Month History

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

Delinquencies 5.97% 6.27% 6.47% 6.45% 6.28% 6.46% 6.20% 6.41% 6.68% 6.08% 6.21% 6.59% 6.80%

Foreclosure 2.22% 2.35% 2.48% 2.50% 2.54% 2.63% 2.66% 2.82% 2.93% 3.05% 3.17% 3.37% 3.38%

Foreclosure Starts 91,993 94,075 104,759 104,939 118,837 108,953 107,552 112,849 109,042 116,812 127,496 121,012 131,826

Seriously Delinquent (90+) or

in Foreclosure 4.70% 4.92% 5.03% 5.05% 5.10% 5.26% 5.22% 5.53% 5.62% 5.71% 5.95% 6.29% 6.34%

New Originations 238K 358K 454K 443K 501K 520K 660K 752K 785K 840K 802K 781K

6.80

%

6.5

9%

6.2

1%

6.08

% 6.68

%

6.4

1%

6.20

%

6.46

%

6.28

%

6.4

5%

6.47

%

6.27

%

5.97

%Total Delinquencies

781K

80

2K

84

0K

785K

75

2K

660K

520K

501K

443K

454K

35

8K

23

8K

New Originations




Seven 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 5.5% 2.1% 7.6% -23.2% National 5.5% 2.1% 7.6% -23.2% National 5.5% 2.1% 7.6% -23.2%

MS 11.6% 1.8% 13.4% -12.6% TN 7.5% 1.0% 8.5% -14.2% KS * 5.1% 1.2% 6.3% -16.0%

NJ * 6.4% 6.5% 12.9% -20.4% GA 7.4% 1.1% 8.5% -21.2% OR 3.6% 2.3% 5.9% -22.5%

FL * 6.1% 6.0% 12.1% -33.6% SC * 6.3% 2.2% 8.4% -19.5% WA 4.0% 1.8% 5.8% -30.2%

NY * 5.9% 5.1% 11.1% -17.2% WV 7.2% 1.2% 8.4% -11.4% IA * 4.1% 1.7% 5.8% -18.1%

ME * 6.3% 4.3% 10.6% -17.5% IL * 5.3% 3.1% 8.4% -28.4% UT 4.6% 0.9% 5.4% -25.8%

LA * 8.5% 2.0% 10.5% -11.7% MA 6.7% 1.6% 8.3% -17.1% VA 4.7% 0.7% 5.3% -18.2%

RI 7.8% 2.6% 10.4% -17.0% OK * 5.7% 2.3% 8.0% -14.0% ID 3.6% 1.5% 5.1% -27.0%

AL 8.4% 1.2% 9.6% -11.4% VT * 4.7% 2.8% 7.5% -17.0% NE * 4.2% 0.6% 4.8% -15.9%

CT * 6.0% 3.5% 9.5% -22.4% KY * 5.6% 1.7% 7.4% -14.9% CA 3.9% 0.8% 4.7% -33.1%

MD * 6.7% 2.7% 9.3% -23.5% NM * 4.9% 2.4% 7.3% -15.9% AZ 3.8% 0.7% 4.5% -29.2%

PA * 6.5% 2.5% 9.1% -16.2% NC 6.2% 1.1% 7.3% -21.1% MN 3.4% 0.7% 4.0% -21.4%

DE * 6.6% 2.5% 9.1% -17.7% DC 4.9% 2.0% 6.9% -20.3% WY 3.5% 0.5% 4.0% -10.7%

HI * 4.2% 4.8% 8.9% -17.8% TX 6.1% 0.8% 6.9% -14.2% MT 3.0% 1.0% 3.9% -17.3%

IN * 6.7% 2.2% 8.9% -18.1% MO 5.9% 0.9% 6.8% -14.5% CO 3.3% 0.6% 3.9% -22.6%

AR 7.3% 1.6% 8.9% -18.8% WI * 5.0% 1.6% 6.7% -21.3% AK 3.3% 0.5% 3.8% -17.0%

NV 6.4% 2.5% 8.9% -36.1% NH 5.6% 1.1% 6.7% -18.5% SD * 2.7% 0.8% 3.4% -17.7%

OH * 6.3% 2.4% 8.7% -19.8% MI 5.6% 0.9% 6.4% -21.1% ND * 1.9% 0.7% 2.5% -17.6%

* - 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%

1/31/2010 53,476,523 1,897,603 882,089 2,870,204 2,031,020 7,680,916 282,601 252 417 141.3%

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%




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 March 2014

Real Estate

Transcript of Mortgage Monitor March 2014