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53 » VISIT US ONLINE @ DSNEWS.COM NATIONAL LOAN DELINQUENCY RATE ON THE DECLINE Mortgage servicing professionals are looking at the lowest foreclosure numbers in nearly a decade. Foreclosure starts from November 2016 fell and pre-payment activity remained strong, according to the First Look report curated by Black Knight Financial Services, Inc. Specifically, the report found that the delinquency rate rose by 2.5 percent, a relatively mild seasonal increase by historical standards, as the annual improvement in mortgage delinquency rates is beginning to slow as the market "normalizes." Black Knight reported that the total U.S. loan delinquency rate for loans 30 or more days past due but not in foreclosure hit 4.46 percent, with a month- over-month increase of 2.55 percent. Despite the slight month-to-month uptick, the delinquency rate still fell 9.43 percent from the year prior. Black Knight also reported that the number of loans in active foreclosure dropped below 500,000 for the first time in nearly 10 years, landing at 498,000 total properties in foreclosure pre-sale inventory. is was a marginal month-over-month decrease of 6,000 but a large drop of 200,000 from November 2015. is change brought the total U.S. foreclosure pre-sale inventory rate to 0.98 percent, 1.35 percent lower than October's rate and 28.88 percent lower than the year before. According to the report, pre-payment activity also remained strong for the month, as applications made prior to the rise in interest rates continued to close. Currently the monthly prepayment rate (SMM) sits at 1.43 percent, a slight decrease of 4.20 percent from October, but a year-over-year whopping increase of 56.07 percent. e First Look also noted that the number of properties that are 30 or more days past due or in foreclosure rose by 55,000 from October to 2,761,000 in November, in part because of the increase in properties that are 30 or more days past due, but not in foreclosure (61,000 from October) and properties that are 90 or more days past due, but not in foreclosure (5,000). e total number of properties that are 30 or more days past due or in foreclosure did decline from November 2015 with a year- over-year change of 428,000 properties. e foreclosure crisis is finally nearing an end, at least according to Bill Emmons, an Economist and Assistant VP with the St. Louis Fed in conjunction with the St. Louis Fed's quarterly Housing Market Conditions report. Emmons said that while some states are taking longer than others to hit pre-crisis foreclosure and delinquency levels, the end is near, perhaps as soon as the first quarter of 2017. He added that the condition of current mortgage borrowers is once again comparable to the period just before the Great Recession and the onset of the foreclosure crisis in the fourth quarter of 2007. "However it is defined, the mortgage foreclosure crisis will go down as one of the worst periods in our nation's financial history. For the nation as a whole, the crisis will have lasted almost a decade—about as long as the Great Depression," Emmons said. "e conclusion that the foreclosure crisis has been a long, miserable experience for many is unavoidable. And many Americans continue to suffer lasting financial, emotional, and even physical pain as a result of their experiences during this time. However, a look at the data today shows that, at least, the end is in sight." In looking deeper at regional and state levels, some areas have experienced severe recessions and housing crises worse than the nation as a whole, Emmons pointed out. In contrast, however, he noted that other metros have suffered less, resulting in a wide range of foreclosure-crisis experiences. An analysis of the states that comprise the St. Louis Fed's Eighth District (Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee) show each of the states entered their respective foreclosure crises during 2008-2009. Emmons said this is somewhat later than the nation as a whole, but by the third quarter of 2016, six of the seven district states had exited their respective crises, with Illinois exiting in December. "For most states in the Eighth District, the slightly shorter duration of their foreclosure crises, when measured against their own data trends, has been offset by higher average rates of serious mortgage distress seen even in non-crisis periods," Emmons said. ECONOMIST ON FORECLOSURE CRISIS: 'THE END IS IN SIGHT'

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