June 07, 2019
Mortgage Prepayments Fall to Lowest Rate in 18 Years
While we have seen some decline in mortgage rates of late from what at one point appeared to be an inevitable turn upward, the concurrent slowdown in home sales in the late months of 2018 and first two months of 2019 seem to have managed to average out against these lower rates, to result in their making no decrease at all in the mortgage prepayment rate. In fact, according to the First Look report produced by Black Knight in February, which the company releases prior to its monthly Mortgage Monitor report, the rate of mortgage prepayments fell to its lowest rate in 18 years during this period.
Though falling rates are normally considered a serious incentive to refinance, the seasonality of the rate decline—over the course of January and February, which are generally considered the “low” seasons in real estate, renowned as they are for being when fewest home sales historically occur—seems to have offset this incentive. The report speculated that the rate of prepayment might increase during the spring, so long as home sales increase as expected and he rates managed to remain low.
Meanwhile, the national rate of mortgage delinquency fell to as low as 3.75 percent in the month of January, putting it at a full 13 percent below the level in the same month last year; and the number of foreclosure starts were a full 19.4 percent below last year’s rate in January. The raw number of active foreclosures also fell—by a full 72,000 from the same period last year—coming in at 265,000. This means the foreclosure inventory is smaller than it has been since May 2006. Interestingly, the places with the lowest number of foreclosures tended to be states in the West and Northwest—Colorado, Idaho, Oregon and Washington. All of the areas with highest foreclosures were in the South: Louisiana, Alabama, West Virginia, and Arkansas.
Topouzis & Associates, P.C. is here to act as a bulwark against title problems initiated in the past, including previous foreclosures. We do title searches and ensure a buyer—or a lender—is gaining clear title to their new property—and we back our services with offerings of title insurance (click here), in case someone along the line of ownership did something that will weaken title at some point in the future.