Prepayment rates continue to signal that the refinancing boom is over.  Black Knight Financial Services said that the single month mortality (SMM) or prepayment rate fell 15 percent in August to 1.07 percent.  Prepayments reached a 12 month high in March and immediately began to decline, slipping on a nearly monthly basis since then.  Despite the decreases the rate remains 11.47 percent higher than in August 2014.
 
The prepayment figures were among the data contained in Black Knight's first release of month-end August loan performance information which will be further expanded in the company's Mortgage Monitor which will be released on October 5.  As usual First Look primarily focuses on distressed loan data and in August that was mostly good news.

While the national delinquency rate was up slightly, 2.47 percent, to 4.83 percent, it had its largest 12 month drop in four years, down 18.22 percent compared to August 2014.  Black Knight defines delinquency as loans more than 30 days past due but not yet in foreclosure.  The number of loans in that category dropped 58,000 from July and is now just a shade under 2.5 million, more than a half million lower than at the same time last year.

Of those delinquent loans Black Knight classifies 865,000 as seriously so, more than 90 days past due but not in foreclosure.  That number dropped by 21,000 from July and by 278,000 on a year-over-year basis. 

Foreclosure starts rose by 6.76 percent month-over-month but there were 1.35 percent fewer starts than a year earlier.  Black Knight said the 80,500 properties entering foreclosure during the month were largely driven by the number of repeat starts.

There were 696,000 properties in the pre-foreclosure inventory, i.e. in the process of foreclosure, down 15,000 and 217,000 respectively for the month and the year. Foreclosure sales, the final step in the process, were conducted at a rate of 1.70 percent of homes in serious delinquency or foreclosure, approximately 26,500 sales.

The total number of distressed properties, including those over 30 days past due or in the foreclosure inventory was 3.142 million at the end of August.  There was a monthly increase of 42,000 in that number compared to July, but total delinquencies are down more than three-quarters of a million since last August.   

All 50 states experienced a decline in non-current loan rates over the last six months but the rate remains two to three times the national average in a number of states.  Mississippi has a non-current rate of nearly 13 percent followed by New Jersey and Louisiana in the 10.2 percent range, and Maine and New York just over and under 9 percent respectively.

Black Knight Financial Services reports its month-end performance data from its loan-level database representing approximately two-thirds of the overall market.