The weighted average loan age among the active mortgage population has been consistently rising for nearly a decade, now officially reaching the highest point ever, the latest Mortgage Monitor report from Black Knight Financial Services, based on data as of the end of August 2014, found.
This data comes despite the fact that loan ages generally vary among different credit score groups.
"In terms of the entire active mortgage population, average loan age has been rising steadily for at least the last nine years," said Kostya Gradushy, Black Knight's manager of research and analytics. "The high volume of originations in 2013 resulted in a temporary slowdown.”
But even with this, the average loan age since then has hit its highest level ever at 54 months.
While the age of loans with credit scores of 750 and above has remained relatively constant for the last five years, lower credit score loans — particularly those with scores below 700 — have seen dramatic increases in average age.
"We also looked again at mortgage performance and found delinquencies in 2012-2014 vintage loans lower than any of the prior seven years. In fact, even among borrowers with lower credit scores, these vintages are outperforming all previous vintages. This holds true for FHA mortgages as well, where we found that early-stage delinquencies were lower than in all pre-2012 vintages," Gradushy said.
In addition, nearly half (49%) of loans foreclosed on at the end of 2013 remained in that status as of August 2014.
And 25% of these loans had been modified at some point in the last eight months before falling back into foreclosure.
Re-default rates are failing to improve with the three-month re-default rate on 2014 modifications at the highest level since 2011. This held true only for modifications on loans in foreclosure, though.
On the other side, re-default rates on modifications of loans in delinquent statuses of both 90 days and 120 days or more past due saw re-default rates decline again in 2014, as they have for the last four years.