ICE Reports Prepayments Rise on Recent Refinance Activity

(Illustration: DA 28/pexels.com)

February saw a clear rebound in prepayment activity, according to the February 2026 ICE First Look at mortgage delinquency, foreclosure and prepayment trends.

Andy Walden, head of mortgage and housing market research at ICE, said prepayment speeds rose 14% month over month and 80% year over year as the wave of refinances triggered by lower rates in January reached closing. “Delinquencies also edged higher, driven by seasonal increases in early-stage delinquencies and a notable rise in seriously past-due loans, though overall delinquency rates remain below pre-pandemic levels,” he added. “These dynamics bear watching in the coming months, as default activity continues to trend off recent record lows.”

Other takeaways from the latest report include:

• The national delinquency rate rose by 7 basis points in February to 3.72%, driven by a 4% seasonal rise in early (30-day) delinquencies and a 3% rise in seriously delinquent (90-plus day) loans. The rate is up 20 basis points from the same time last year but remains 12 basis points below its February 2020 pre-pandemic benchmark.

• Combined serious delinquency and foreclosure volumes increased: At the end of January, 878,000 loans were in a state of severe delinquency or foreclosure. That figure is up 175,000 (25%) over the past four months, the highest since June 2022, and the highest since June 2018 when excluding the immediate effect of the pandemic. FHA loans account for roughly 80% of the recent increase.

• Cure rates have slowed: The rise in seriously delinquent loans is driven primarily by a decline in cure activity rather than a spike in new defaults. While the number of new loans that have become 90-plus days delinquent over the past four months has remained roughly flat on an annual basis, cure rates among 90-plus day delinquent mortgages are down by more than 40%.

• Foreclosure activity is rising off recent record lows: February saw 35,000 foreclosure starts, down 16% from January but up 7% year over year. Foreclosure sales declined 13% in the month but rose 25% year over year. The share of loans in active foreclosure remains 6 basis points below pre-pandemic levels, though it rose by 4% in February and is up 25% from a year ago.