Mortgage prepayment rate is lowest in 10 years: Black Knight
Mortgage prepayment speeds fell to their lowest level in 10 years in November as rising interest rates took a toll on origination activity, Black Knight said.
The monthly prepayment rate was 66 basis points, down 14.95% from October's 80 basis points and down 33% from 98 basis points in November 2017, according to the company's First Look report.
Even though refis typically drive prepays, recently the primary driver was existing-home sales, Black Knight said in a press release. However, those rose for the second consecutive month.
"The last time the prepayment rate was this low — in the heat of the financial crisis — interest rates were above 6% and purchase lending had fallen by more than 50% in a 24-month span," Black Knight said.
Mortgage delinquencies rose by 1.78% from October to 3.71%, which Black Knight termed as a seasonal increase. Compared with last November, borrowers that are 30 days or more late on their payments is down 18.53%.
There were 45,200 foreclosure starts during November, this is down 10.67% from October and 5.44% from one year ago.
The number of properties with a delinquent loan but not yet in foreclosure is 1.925 million, up 41,000 from October, but down 399,000 from November 2017. Seriously delinquent loans — those 90 days late but not yet in foreclosure — rose by 11,000 from the previous month to 510,000.
There are 268,000 properties in foreclosure, up 1,000 from October although down 69,000 from November 2017.