The Data & Analytics division of Black Knight Financial Services, Inc. recently released the “first look” at July 2016 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.
According to the report, it was noted that by the end of June, despite the 'Brexit' vote as well as mortgage rates hovering near all-time lows and the population of refinanceable borrowers swelling to 8.7 million, Black Knight determined that prepayment speeds, which are usually a historically good indicator of refinance activity, fell by 12 percent in July.
The report states that the national delinquency rate jumped close to 5 percent from June. This rate rose above 4.5 percent for the first time since February.
Black Knight notes though that with July ending on a Sunday, and in such cases, any payments made on the last two days of the month can't be processed until the following month, which typically leads to a spike in the delinquency rate.
The report says that with this being the case, it's very likely that there will be an August decline seen as it's also typical to see a partial, though not usually full, recovery the following month.
Additionally, the July foreclosure starts were reported to be 61,300 which is a 12 percent decline from last month and was the second lowest monthly total in 10 years.
Likewise, the report shows that the inventory of loans in active foreclosure continued its long-term downward trend. It fell 20 percent year to date to 550,000 active foreclosures. This number hit its lowest point since July 2007.
Black Knight also reports that non-current rates continue to climb from six months ago in North Dakota, Alaska and Wyoming. This due to the impact on mortgage performance from sustained pressure on the oil and gas sector.
Finally, it was reported that prepayment activity fell in July despite overall growth in the number of refinance candidates and 30-year interest rates remaining at or below 3.45 percent for much of the month.
Black Knight will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by detailed charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available online by September 6, 2016.