Despite the gradual but steady improvement in mortgage delinquencies, the national delinquency rate is set to remain elevated for another 17 months at the current rate of progress — and the figures are further escalated for seriously delinquent loans, according to Black Knight’s latest Mortgage Monitor report.

Delinquencies are currently at their lowest rate (6.08%) since April 2020, per Black Knight’s data. The inflow of loans transitioning from current to 30 days past due returned to pre-pandemic levels as early as July, and continues to remain below 2019 levels now. December was another in a string of months with moderate improvement in overall delinquencies, and serious delinquencies decreased as well, falling from 3.56 million in November to 3.43 million to wrap up the year.

Those serious delinquencies, however, remain problematic. While almost 40% of the COVID-related increase in overall delinquencies has now corrected, just 11% of serious delinquencies have, “providing a more accurate representation of the true recovery to date,” the Mortgage Monitor report said. And 2020 ended with 1.7 million more seriously delinquent mortgages than 2019, with Black Knight projecting, given the current trajectory, that it would take nearly five more years for serious delinquencies to normalize to pre-pandemic levels.

Notably, the market is currently on pace to still have an excess of between 1.5 million to 1.6 million seriously delinquent loans by the end of March. March is significant because, barring any additional action, that’s when 24% of all forbearance plans are set to hit the expiration dates of their 12-month terms — currently the longest term allowed through the CARES Act.

More than 600,000 seriously delinquent mortgages will move out of forbearance and into post-forbearance loss mitigation, with another 300,000 borrowers scheduled to reach the end of forbearance at the close of April.

Meanwhile, payment patterns among borrowers in the forbearance plans has deteriorated as the pandemic has dragged on. Earlier in the pandemic, approximately half of homeowners in forbearance continued to make their monthly mortgage payments. That number, however, has sunk to 12% today, making it a reasonable assumption that many borrowers who remain in forbearance for the entire 12-month term may face more of a challenge in returning to making payments.

“This clearly shows the industry-wide need for post-forbearance waterfalls to determine borrower need and readiness – while foreclosure moratoriums are still in place,” said the report. “By efficiently addressing lower risk borrowers as they exit forbearance, focus can then shift to those more in need.”