Rising interest rates are driving prepayment speeds down significantly, a new report from Black Knight Financial Services shows.
Black Knight’s report, released Thursday morning, shows that prepayment speeds fell by 15.26% in February, marking a 40% overall year-to-date decline.
February’s prepayment rate of 0.8% is the lowest monthly rate in three years, the report showed.
And with interest rates consistently rising over the last few months, and expected to continue climbing, prepayments are likely to continue slowing.
Black Knight’s “first look” at February’s mortgage data, which is pulled from Black Knight’s loan-level database representing the majority of the national mortgage market, also showed that the number of loans in active foreclosure fell in February to its lowest level since June 2007.
According to the report, there were 470,000 loans in active foreclosure in February, down 11,000 from January and down 185,000 from the previous year. Those figures represent a nearly 10-year low.
Additionally, the report showed that there were 57,900 foreclosure starts in February, representing an 18% decline from January’s total and a 31% drop from last year’s levels.
Overall, the total loan delinquency rate (loans that are 30 days or more past due, but not in foreclosure) fell to 4.21%, down 0.98% from January and 5.51% from February 2016.
In raw numbers, there were approximately 2.14 million properties that are 30 or more days past due, but not in foreclosure, in February. That’s down 27,000 from January and down 117,000 from February 2016.
The report also showed that there were 641,000 properties that are 90 or more days past due, but not in foreclosure – a drop of 23,000 from January and a decline of 131,000 from the same time period last year.
In totality, the report showed that there were 2.61 million properties that were 30 or more days past due or in foreclosure in February. That’s down 38,000 from January, and down 302,000 from February 2016.