Black Knight: January Prepayment Rate at 18-Year Low

Black Knight, Jacksonville, Fla., released its January First Look Mortgage Monitor, reporting loan prepayments fell to an 18-year low as seasonal home sales reductions outweighed a rise in refinance incentives.

Despite recent declines in interest rates, January’s prepayment rate was the lowest since November 2000.

“Housing turnover typically bottoms out in January and February, so prepayments could pick up again if rates remain low through the early spring home buying season,” the report said.

Black Knight reported the national delinquency rate fell by 3.5 percent in January to 3.75 percent and is now nearly 13 percent below last year’s level. However, foreclosure starts rose by 8.42 percent month-over-month to 50,200, but fell by more than 19 percent year-over-year. Loans in active foreclosure continued its downward trend; Black Knight reported 265,000 active foreclosures, down 72,000 from one year ago.

Earlier this month, the Mortgage Bankers Association issued its 4th Quarter National Delinquency Survey, reporting overall mortgage loan delinquency rates fell to a seasonally adjusted rate of 4.06 percent, down by 41 basis points from the third quarter and by 111 basis points from one year ago. The percentage of loans on which foreclosure actions started in the fourth quarter rose by two basis points to 0.25 percent.

MBA reported delinquency rates dropped from the previous quarter and on a year-over-year basis across all loan types–conventional, FHA and VA–and across all stages of delinquency–30 days, 60 days and 90+ days.

Other Black Knight January data:

–Properties 30 or more days past due, but not in foreclosure: 1.945 million, down by 68,000 from December and by 257,000 from a year ago.

–Properties 90 or more days past due, but not in foreclosure: 504,000, down by 7,000 from December and by 203,000 from a year ago.

–Properties in foreclosure pre-sale inventory: 265,000, down by 6,000 from December and by 72,000 from a year ago.

–Properties 30 or more days past due or in foreclosure: 2.210 million, down by 73,000 in December and by 329,000 from a year ago.

–States with the highest percentage of non-current loans: Mississippi (10.10%); Louisiana (7.96%); Alabama (6.75%); West Virginia (6.42%); and Arkansas (6.04%).

–States with the lowest percentage of non-current loans: Colorado (1.82%); Oregon (2.03%); Washington (2.15%); Idaho (2.20%); and Utah (2.45%).

–States with the highest percentage of 90-day plus delinquencies: Mississippi (3.0%); Louisiana (2.09%); Alabama (1.92%); Arkansas (1.80%); and Delaware (1.41%).