Black Knight: Low Interest Rates Continue To Push Prepayments Higher

Posted by Patrick Barnard on July 24, 2017 No Comments

Low interest rates continued to push prepayments higher in June, according to Black Knight Financial Service’s “First Look” report.

The prepayment rate in June was 1.12%, an increase of 5.3% compared with May, according to the report.

It was the second consecutive month that the prepayment rate increased. In May, the prepayment rate increased 23%, month over month.

Still, the national prepayment rate in June was 20% below the level seen in June 2016.

Meanwhile, delinquencies and foreclosures continued to fall. The total U.S. delinquency rate (30 days or more past due but not in foreclosure) was 3.80%, an increase of 0.12% compared with May but a decrease of 11.84% compared with June 2016.

About 1.9 million homes were in some stage of delinquency in June, a decrease of about 5,000
compared with May and down about 246,000 compared with June 2016.

About 555,000 properties were in serious delinquency (90 or more days past due but not in foreclosure), down about 7,000 compared with May and down about 137,000 from a year earlier.

There were a total of about 56,500 foreclosure starts in June, an increase of 1.25% compared with May but a decrease of 18.47% compared with June 2016.

The total U.S. foreclosure pre-sale inventory rate was 0.81%, a decrease of 2.71% compared with May but down 27.01% compared with June of last year.

As of the end of June, there were about 410,000 properties in the foreclosure pre-sale inventory, a decrease of about 11,000 compared with the previous month and down about 148,000 compared with a year earlier.

Although total non-current inventory increased 3% on a seasonal basis during the second quarter, the inventory of serious delinquencies and active foreclosures fell by 7%, according to the report.

In total, serious delinquencies and active foreclosures have decreased by 17% – or nearly 200,000 loans – so far this year.

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