Mortgage Watch | September 23, 2019

Timely payments and a surge in refinances mean lower foreclosures

Mortgage “performance.” Sounds like a fun financial song and dance, right? If you recall the days of heavy foreclosures, however, it’s no joke, especially to the mortgage servicing industry. And according to experts who monitor such things, mortgage performance has markedly improved.

According to data from First Look at the latest mortgage performance data from actionable analytics company Black Knight, that foreclosure starts hit an 18-year low in August, at 36.2K for the month, down more than 23% from this time last year — the smallest it has been since 2005.

But that’s not all. Mortgage holders are also looking to pay off their homes faster, with prepayments increasing by 5% from July to reach a three-year high, and August’s prepayment rate was up 62% from the same time last year.

According to ATTOM Data Solutions, one in every 2,554 U.S. properties received a foreclosure filing during the month of August. Falling interest rates and a subsequent increase in rate/term refinances has helped to cause this surge in on-time payments and proactive borrowing.

A report in DS News says, “Falling rates and an abundance of refinance candidates were primary drivers behind servicers retaining 24% of all refinancing borrowers – the highest such retention rate since late 2017 – and 30% of rate/term borrowers specifically.” It goes on to say that with interest rates at three-year lows, anecdotal evidence suggests that in recent weeks, mortgage lenders had been inundated with inbound refinance business.

Source: FirstLook, Black Knight, ATTOM Data Solutions, TBWS

Rates Currently Trending: Neutral

Mortgage rates are trending sideways so far today. Last week the MBS market improved by +35bps. This was enough to move rates lower last week. We saw high rate volatility throughout the week.

 

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 43 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and son Matt, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 23 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, as well as sponsors Paper Shredding and E-Waste Recycling events twice a year.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.