Prepayment Speeds Drop in July Despite Low Rates

Prepayment activity declined during July in spite of the low rates that added to the number of borrowers who could refinance, Black Knight Financial Services said in its "First Look" data release.

The monthly prepayment rate dropped 12% from June and 1% year over year to 1.26%, Black Knight said Monday. In June, prepayment speeds had reached a 12-month high.

The total U.S. delinquency rate ticked up to 4.51%, representing a 4.8% month over month increase but a 3.4% decline from last year. Black Knight added that a decrease is expected in August based on past history.

The total pre-sale foreclosure inventory continued its descent, dropping by 8,000 properties month over month and 214,000 properties year over year to roughly 550,000 homes.

Foreclosure starts also went down 11.5% month over month and 14.3% year over year to 61,300, representing the second lowest monthly total in a decade.