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Tag Archives: Prepayments

Prepayments, Purchase Originations Trend Up

Analyzing data as of the end of May, Black Knight Financial Services reported another gain in monthly prepayment activity—an indicator of refinancing—marking the third straight month of increases. At the same time, long-term fixed mortgage rates fell to 4.19 percent, their lowest level in more than half a year. Meanwhile, Black Knight also found that seasonal purchase origination activity has risen, with approximately 897,000 originations through April.

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Underwater Loans Down by Half in First Quarter

Underwater

The number of underwater borrows dropped by nearly half from Q1 2012 to Q1 2013, Lender Processing Services (LPS) reported in its May Mortgage Monitor. As of the end of Q1, the total share of mortgages with loan-to-value (LTV) ratios of greater than 100 percent was down to 14.7 percent of all currently active loans. Even in the Western "sand states," where borrowers have struggled in recent years, LPS reported underwater loans were down as much as 53 percent year-over-year.

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Fitch: Recent Prime Borrowers Prepaying at Rapid Rates

According to Fitch Ratings, prime RMBS mortgage pools issued since 2010 had an average conditional prepayment rate (CPR) of about 42 percent, more than twice as fast as the rates of outstanding prime loans securitized in earlier vintages. Generally speaking, Fitch explained high refinance activity tends lead to more "performance volatility" since loans remaining in mortgage pools are usually of poorer quality. However, Fitch is seeing a different trend this time around.

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LPS: Early-Stage Delinquencies Drive Up September Total

Mortgage loan delinquencies increased 7.72 percent from August to September--the largest monthly increase since 2008, according to a report from Lender Processing Services (LPS). The upturn was substantial, even for a month historically marked by seasonal rises in delinquency, LPS said. However, company analysts say it is important to look at the longer-term trend, which shows a significant decrease in the delinquency rate since its January 2010 peak.

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Refinance Activity Brings Prepayments to Seven-Year High

Mortgage delinquency rates fell in August as prepayment rates shot up, Lender Processing Services (LPS) revealed. LPS' August Mortgage Monitor report showed a national delinquency rate of 6.9 percent, consistent with the company's earlier first-look data. Delinquencies were down 2.3 percent from July and 10.6 percent from their January 2010 peak. The drop in delinquency was accompanied by a significant boost in prepayment rates, hitting an annualized rate of nearly 25 percent--a level not seen since 2005.

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