Monday, October 05, 2015

Black Knight August Mortgage Monitor

by Bill McBride on 10/05/2015 02:36:00 PM

Black Knight Financial Services (BKFS) released their Mortgage Monitor report for August today. According to BKFS, 4.83% of mortgages were delinquent in August, down from 4.71% in July. BKFS reported that 1.37% of mortgages were in the foreclosure process, down from 1.80% in August 2014.

This gives a total of 6.20% delinquent or in foreclosure. It breaks down as:

• 1,582,000 properties that are 30 or more days, and less than 90 days past due, but not in foreclosure.
• 865,000 properties that are 90 or more days delinquent, but not in foreclosure.
• 696,000 loans in foreclosure process.

For a total of ​​3,142,000 loans delinquent or in foreclosure in August. This is down from 3,908,000 in August 2014.

Press Release: Black Knight’s August Mortgage Monitor: Cash-Out Refinances Up 68 Percent Year-Over-Year

Today, the Data and Analytics division of Black Knight Financial Services, Inc. (NYSE: BKFS) released its latest Mortgage Monitor Report, based on data as of the end of August 2015. ... As Black Knight Data & Analytics Senior Vice President Ben Graboske explained, borrowers have been capitalizing on increased equity available in their homes and still historically low rates.

“In the second quarter of 2015, we saw cash-out refinance volumes rise almost 70 percent from the same period last year,” said Graboske. “While this is the highest volume in cash-out refinances we’ve seen in five years, it’s still nearly 80 percent below the peak in Q3 2005. Even so, it’s clear that borrowers have been capitalizing on the increased equity available to them. As we reported in last month’s Mortgage Monitor, total equity of mortgage holders has risen by about $1 trillion over the last year, and ‘tappable’ equity stands at $4.5 trillion. Borrowers today are pulling out an average of $67,000 of equity through cash-out refis, nearly the levels we saw back in 2006. What’s really interesting though, is that even after pulling out that equity, resulting average LTVs are at 68 percent, the lowest level we’ve seen in over 10 years. During this same time span, we’ve seen second lien HELOC lending rise, albeit at a lesser rate; that volume is up 40 percent from last year. However, as interest rates rise, we could see an increase in HELOC lending and corresponding slowing in first lien cash-out refis, as borrowers will likely want to hang on to lower rates for their first mortgage while still being able to tap available equity.”
emphasis added
BKFS Delinquencies Click on graph for larger image.

This graph from Black Knight shows average cash out and the resulting LTV. Cash outs are up, but the LTVs are still very low.

From Black Knight:
Borrowers today are pulling out an average of $67,000 of equity through cash-out refinances, nearly at the levels seen back in 2006

Even after pulling out equity, resulting average LTVs are at 68 percent, the lowest level in over 10 years

Less than 10 percent of all cash-out refinances have LTVs above 80 percent, also at the lowest level in over 10 years.

Nearly 60 percent of cash-out refinance volume is coming from borrowers with UPBs below $200K
There is much more in the mortgage monitor.