Black Knight: Strong 4th Quarter Pushes Originations to 9-Year High

Black Knight Financial Services, Jacksonville, Fla., said fourth quarter mortgage activity pushed mortgage originations to their highest level since 2007.

The company’s Mortgage Monitor report showed $2.1 trillion in first lien mortgages originated in 2016, a 17% jump from 2015. Refi lending increased by 22%, while purchase originations rose by 13%.

“A strong fourth quarter finish to the year pushed total 2016 origination volumes to the highest level seen in nine years,” said Black Knight Data & Analytics Executive Vice President Ben Graboske. “We’ve now seen nine consecutive quarters of double-digit purchase origination growth.”

The report noted overall growth in the purchase market for 21 of the past 22 quarters and represented the second straight year of double-digit growth in purchase lending, which hit its highest yearly total since 2006 at $1.1 trillion. However, purchase lending was still 28 percent off the peak volume in 2005.

Black Knight reported the refinance market topped $1 trillion in 2016 as well, driven by historically low rates. In the fourth quarter, refinance origination volumes rose by 58 percent from 2015 and were highest of any quarter since second quarter 2013.

The report noted, however, that prepayment speeds fell by 30 percent from December to January. “When you couple this with the fact that there are 5.7 million, or nearly 70 percent, fewer refinance candidates in the market entering Q1 2017 than there were entering Q4 2016, it becomes very likely that we will see these numbers decline significantly in the first quarter,” Graboske said.

Other report highlights:

–Total U.S. loan delinquency rate: 4.25% in January, a 3.85% decline from December.
–Total U.S. foreclosure pre-sale inventory rate: 0.94% in January, an 0.46% decline from December.
–States with highest percentage of non-current loans: Mississippi, Louisiana, Alabama, West Virginia and New Jersey.
–States with lowest percentage of non-current loans: Idaho, Montana, Minnesota, Colorado and North Dakota
–States with highest percentage of seriously delinquent loans: Mississippi, Louisiana, Alabama, Arkansas and Tennessee.