Black Knight Financial Services' Mortgage Performance Data Shows 2013 Loans Best Performing on Record; All Home Equity Originations Up 70 Percent
-- Non-Agency Participation in Mortgage Market on the Rise
-- Second Lien Home Equity Loan Origination Volume Has More Than Doubled
-- Purchase Loans Now Total More than 50 Percent of Originations
-- "Refinancible" Population Shrinks to Under 6 Million
JACKSONVILLE, Fla., Jan. 14, 2014 /PRNewswire/ -- Today, the Data and Analytics division of Black Knight Financial Services (formerly the LPS Data & Analytics division) released its November Mortgage Monitor Report, which found that loans originated in 2013 are proving to be the best-performing mortgages on record. In addition, while overall originations are at their lowest levels since 2010, the past year has seen a significant increase in the volume of home equity loans and lines of credit.
"Looking at the most current mortgage origination data, several points become clear," said Herb Blecher, senior vice president of Black Knight Financial Services' Data & Analytics division. "First is that heightened credit standards have resulted in this year being the best-performing vintage on record. Even adjusting for some of these changes, such as credit scores and loan-to-values, we are seeing total delinquencies for 2013 loans at extremely low levels across every product category. Secondly, while overall volumes are down, we are seeing an increased proportion of the market being supported by non-agency (vs. government) lending – with the share nearly doubling as compared to 2010.
"Although tighter credit requirements, coupled with interest rate increases, have helped drive originations down to their lowest level since 2010, thanks to increasing home prices, we have seen a significant increase in home equity lending. While first mortgage originations are almost half the levels as one year ago, total home equity lending, including loans and lines, has increased by 70 percent, and originations of second lien home equity loans have more than doubled. Finally, in the first lien market, we also observed a 75 percent year-over-year increase in the share of non-agency jumbo prime lending. Notably, nearly all of these jumbo loans have been originated with no mortgage insurance, which may indicate an increased appetite for risk, as well as an opportunity to expand credit criteria, for originations within the private market."
The November data also showed that the population of "refinancible" mortgages has decreased by about 4 million loans since the end of 2012. Today, just 5.9 million loans meet broad-based refinance criteria, including loan-to-value ratios of 80 percent or less; credit scores of 720 or higher; current payment status; and interest rates higher than the prevailing interest rate. However, loosening of credit standards, even slightly, could have a significant effect. As an example, lowering the credit score criteria to 700 increases the refinancible population by almost 17 percent, or an additional 1 million loans.
As was reported in LPS' First Look release, New Jersey has overtaken the "sand state" of Florida in terms of total non-current loans. Non-current rates in both New Jersey and New York are now on par with Florida and Nevada, and twice that of either California or Arizona. Other key results include:
| Total U.S. loan delinquency rate: |
6.45% |
| Month-over-month change in delinquency rate: |
2.63% |
| Total U.S. foreclosure presale inventory rate: |
2.50% |
| Month-over-month change in foreclosure presale inventory rate: |
-1.72% |
| States with highest percentage of non-current* loans: |
MS, NJ, FL, NY, LA |
| States with the lowest percentage of non-current* loans: |
CO, MT, AK, SD, ND |
*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.
Totals are extrapolated based on Black Knight Financial Services' loan-level database of mortgage assets.
About the Mortgage Monitor
The Data & Analytics division of Black Knight Financial Services manages the nation's leading repository of loan-level residential mortgage data and performance information on nearly 40 million loans across the spectrum of credit products. The company's research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for the monthly Mortgage Monitor Report. To review the full report, visit http://www.lpsvcs.com/LPSCorporateInformation/CommunicationCenter/DataReports/Pages/Mortgage-Monitor.aspx
About Black Knight Financial Services
Black Knight Financial Services, a Fidelity National Financial (NYSE:FNF) company, is the mortgage and finance industries' leading provider of integrated technology, services and data solutions. Comprised of technology offerings from the union of LPS and ServiceLink, Black Knight Financial Services offers leading software systems; data and analytics offerings; and information solutions that facilitate and automate many of the business processes across the mortgage life cycle.
Black Knight Financial Services helps clients in the mortgage industry and beyond achieve their strategic goals, realize greater success and better serve their customers by delivering best-in-class technology, services and insight with a relentless commitment to excellence, innovation, integrity and leadership. For more information on Black Knight Financial Services, please visit www.bkfs.com.
SOURCE Black Knight Financial Services
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