by Bill McBride on 3/07/2016 08:01:00 AM
Monday, March 07, 2016
Black Knight Financial Services (BKFS) released their Mortgage Monitor report for January today. According to BKFS, 5.09% of mortgages were delinquent in January, up from 4.78% in December. BKFS reported that 1.30% of mortgages were in the foreclosure process.
This gives a total of 6.39% delinquent or in foreclosure.
Press Release: Black Knight’s Mortgage Monitor: Declining Interest Rates Boost Refinanceable Population by 1.5 Million in First Six Weeks of 2016; $20 Billion in Potential Annual Savings
Today, the Data & Analytics division of Black Knight Financial Services, Inc. (NYSE: BKFS) released its latest Mortgage Monitor Report, based on data as of the end of January 2016. After mortgage interest rates fell by 30 basis points in the first six weeks of 2016, Black Knight revisited its recent analysis of the population of refinanceable borrowers that could both qualify for and benefit from refinancing their 30year mortgages. Using broad-based eligibility criteria, Black Knight found this population has grown significantly since the start of the year. As Black Knight Data & Analytics Senior Vice President Ben Graboske explained, millions of mortgage holders could potentially save thousands of dollars per year by refinancing at today’s rates.Click on graph for larger image.
“When Black Knight last looked at the refinanceable population just two months ago, there were 5.2 million potential candidates, and that number was on the decline,” said Graboske. “That analysis was shortly after the Federal Reserve raised its target rate by 25 basis points, at which time the prevailing wisdom was that mortgage interest rates would rise in response. Global economic shocks then sent investors looking for the safety of U.S. Treasuries, driving down yields on benchmark 10-year bonds. Mortgage interest rates began to fall in defiance of prevailing wisdom, and the refinanceable population grew by 30 percent in the first six weeks of 2016. As a result, an additional 1.5 million mortgage holders could now likely both qualify for and benefit from refinancing, bringing the total number of potential refinance candidates to 6.7 million.
This graph from Black Knight shows their estimate of refinance candidates.
From Black Knight:
Recent interest rate declines have given 1.5 million additional borrowers incentive to refinanceAn on the increase in delinquencies from Black Knight (calendar driven):
The total refinanceable population of 6.7 million has grown by 30 percent in just the first six weeks of 2016
This drastic rise above the 5.2 million potential refinance candidates is driven by the number of borrowers with current interest rates is in the 4.5 percent range
This January’s delinquency rate increase appears to be primarily calendar-drivenThere is much more in the mortgage monitor.
Sunday month-ends typically result in delinquency rate increases as servicers are unable to process any payments made on the last two calendar days of the month
The five largest monthover-month increases seen in the past three years have all come in months ending on a Sunday
It is typical to see a partial, but not full, recovery the following month