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A Closer Look At Last Month’s Trends

The Data & Analytics division of Black Knight Financial Services, Inc. reports the following “first look” at July 2016 month-end mortgage performance statistics derived from its loan-level database representing the majority of the national mortgage market.

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 4.51%
Month-over-month change: 4.78%
Year-over-year change: -3.38%

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Total U.S. foreclosure pre-sale inventory rate: 1.09%
Month-over-month change: -1.68%
Year-over-year change: -28.36%

Total U.S. foreclosure starts: 61,300
Month-over-month change: -11.54%
Year-over-year change: -14.27%

Monthly Prepayment Rate (SMM): 1.26%
Month-over-month change: -11.98%
Year-over-year change: -1.00%

Foreclosure Sales as % of 90+: 1.99%
Month-over-month change: -13.65%
Year-over-year change: 1.05%

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Number of properties that are 30 or more days past due, but not in foreclosure: 2,286,000
Month-over-month change: 108,000
Year-over-year change: -70,000

Number of properties that are 90 or more days past due, but not in foreclosure: 695,000
Month-over-month change: 3,000
Year-over-year change: -147,000

Number of properties in foreclosure pre-sale inventory: 550,000
Month-over-month change: -8,000
Year-over-year change: -214,000

Number of properties that are 30 or more days past due or in foreclosure: 2,836,000
Month-over-month change: 100,000
Year-over-year change: -284,000

Top 5 States by Non-Current* Percentage 
Mississippi:      11.67%
Louisiana:        9.63%
New Jersey:      8.95%
West Virginia:  8.34%
Alabama:         8.21%

Bottom 5 States by Non-Current* Percentage 
South Dakota: 3.13%
Montana:         3.13%
Minnesota:       2.92%
Colorado:         2.71%
North Dakota: 2.56%

Top 5 States by 90+ Days Delinquent Percentage 
Mississippi:      3.56%
Louisiana:        2.69%
Alabama:         2.45%
Arkansas:         2.06%
Tennessee:       2.04%

Top 5 States by 6-Month Improvement in Non-Current* Percentage
Nevada:           -17.28%
Nebraska:         -15.41%
Florida:              -15.33%
Washington:     -15.13%
Oregon:           -14.91%

Top 5 States by 6-Month Deterioration in Non-Current* Percentage
North Dakota:  6.21%
Alaska:             4.72%
Wyoming:        2.27%
Louisiana:        -8.21%
Vermont:         -9.23%

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.

Notes:

  1. Totals are extrapolated based on Black Knight Financial Services’ loan-level database of mortgage assets.
  2. All whole numbers are rounded to the nearest thousand, except foreclosure starts, which are rounded to the nearest hundred.

For a more detailed view of this month’s “first look” data, please visit the Black Knight newsroom at http://www.bkfs.com/CorporateInformation/NewsRoom/Pages/20160822.aspx.

The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by detailed charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available online at http://www.bkfs.com/CorporateInformation/NewsRoom/Pages/Mortgage-Monitor.aspx  by Sept. 6, 2016.

About The Author

How Are Rising Rates Impacting The Market Thus Far?

*How Are Rising Rates Impacting The Market Thus Far?*
**New Data Emerges**

rates-rising***There’s been a lot of talk that rising interest rates are going to slow refinance activity, but is that really what’s happening? Some say that we’re in for a prolonged purchase market starting next year. Is that an accurate assumption? New data from Ellie Mae sheds some light on these predictions.

****According to the latest Ellie Mae Origination Insight Report, “in June, the mix of refinance-to-purchase loans continued to rebalance as higher rates made refinancing less attractive and the prospect of higher home prices and potentially higher interest rates may have brought more buyers to the closing table,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “Closed purchase loans accounted for 49% of the volume in June 2013, the highest level since we began tracking in August 2011.

****The Ellie Mae Origination Insight Report provides monthly data and insights from a sampling of closed loan applications that flow through Ellie Mae’s Encompass360 mortgage management software and Ellie Mae Network. The characteristics of closed and denied loans presented in this report are averages.

****In 2012, the total volume of mortgages that ran through Ellie Mae’s Encompass360 mortgage management software was approximately three million loan applications, or 20% of all U.S. mortgage originations.

****The Origination Insight Report mines its application data from a sampling of approximately 44% of all mortgage applications that were initiated on the Encompass origination platform. Given the size of this sample and Ellie Mae’s market share, the company believes the Origination Insight Report is a strong proxy of the underwriting standards that are being employed by lenders across the country.

****What other findings could be seen in the latest report? “The average interest rate on a 30-year loan rose to 3.918% in June 2013, the highest point since June 2012 when it was 3.992%,” Corr noted. “The transition from a refinance to a purchase market may also be why we saw a growth in adjustable rate mortgages in June 2013, hitting 4% for the first time since May 2012. This may be a sign that some buyers are trying to stretch their budget as both home prices and interest rates tick up.”

****Finally, Corr noted, “HARP-related refinancing activity continued to cool with conventional refinances at 95%-plus LTV dropping from 9.40% in May 2013 to 8.00% in June 2013.”

Refis Are Still A Huge Market Driver

*Refis Are Still A Huge Market Driver*
**New Data Emerges**

race-car***New data from Ellie Mae shows that refinances are still driving the mortgage market. To get a meaningful view of lender “pull-through,” Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the October 2012 applications) to calculate an overall closing rate of 55.0% in January 2013, up slightly from 54.7% in December 2012, which is mostly due to an increase in refinances.

****“Since last summer, the refinance share has been climbing steadily and in January 2013 it reached 73%, the highest level since we began tracking this data in August 2011,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “Continued low interest rates and home-buying seasonality are big reasons for this shift, but so is HARP 2.0 activity. Closed conventional refinances with LTVs of 95%-plus ticked up slightly to 11.6% in January 2013 from the previous high of 11.4% in December 2012, indicating that more underwater borrowers are being able to refinance thanks to HARP2.0.

****The Ellie Mae Origination Insight Report for January 2013 draws its data and insights from a sampling of loan applications that flow through Ellie Mae’s Encompass360 mortgage management software and Ellie Mae Network. The Origination Insight Report mines its application data from a robust sampling of approximately 44% of all mortgage applications that were initiated on the Encompass origination platform.

****“The share of FHA loans vs. conventional loans declined to 18% in January 2013, which has been a new low since our tracking began.” Corr continued, “This may indicate that higher premiums and other program changes are making FHA loans less attractive.”

****Corr also added, “Average credit scores for conventional loans in January 2013 were slightly lower compared to the same time last year A year ago, the average credit score was 769 for a conventional refinance and 763 for a similar purchase. In January 2013, those averages dropped to 763 for refinances and 760 for purchases. While the overall credit score requirement remains tight, it appears that we are beginning to see some loosening.”

Home Prices Still Rising

*Home Prices Still Rising*
**New Data Emerges**

house-cost***The CoreLogic Home Price Index (HPI) showed that home prices nationwide, including distressed sales, increased on a year-over-year basis by 8.3 percent in December 2012 compared to December 2011. This change represents the biggest increase since May 2006 and the 10th consecutive monthly increase in home prices nationally. On a month-over-month basis, including distressed sales, home prices increased by 0.4 percent in December 2012 compared to November 2012. The HPI analysis shows that all but four states are experiencing year-over-year price gains.

****Excluding distressed sales, home prices increased on a year-over-year basis by 7.5 percent in December 2012 compared to December 2011. On a month-over-month basis, excluding distressed sales, home prices increased 0.9 percent in December 2012 compared to November 2012. Distressed sales include short sales and real estate owned (REO) transactions.

****The CoreLogic Pending HPI indicates that January 2013 home prices, including distressed sales, are expected to rise by 7.9 percent on a year-over-year basis from January 2012 and fall by 1 percent on a month-over-month basis from December 2012, reflecting a seasonal winter slowdown. Excluding distressed sales, January 2013 house prices are poised to rise 8.6 percent year over year from January 2012 and by 0.7 percent month over month from December 2012. The CoreLogic Pending HPI is a proprietary and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.

****“December marked 10 consecutive months of year-over-year home price improvements, and the strongest growth since the height of the last housing boom more than six years ago,” said Mark Fleming, chief economist for CoreLogic. “We expect price growth to continue in January as our Pending HPI shows strong year-over-year appreciation.”

****“We are heading into 2013 with home prices on the rebound,” said Anand Nallathambi, president and CEO of CoreLogic. “The upward trend in home prices in 2012 was broad based with 46 of 50 states registering gains for the year. All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery.”

Foreclosures Dip

*Foreclosures Dip*
**By Tony Garritano**

TonyG***According to CoreLogic, there were 56,000 completed foreclosures in the U.S. in December 2012, down from 71,000 in December 2011, a year-over-year decrease of 21 percent. On a month-over-month basis, completed foreclosures fell from 58,000 in November 2012 to the current 56,000, a decrease of 3 percent. As a basis of comparison, prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 4.1 million completed foreclosures across the country.

****Highlights as of December 2012:

****>> The five states with the highest number of completed foreclosures for the 12 months ending in December 2012 were: California (100,000), Florida (98,000), Michigan (74,000), Texas (57,000) and Georgia (49,000). These five states account for almost half of all completed foreclosures nationally.

****>> The five states with the lowest number of completed foreclosures for the 12 months ending in December 2012 were: District of Columbia (89), Hawaii (421), North Dakota (521), Maine (537) and West Virginia (645).

****>> The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (10.1 percent), New Jersey (7.0 percent), New York (5.1 percent), Nevada (4.7 percent) and Illinois (4.5 percent).

****>> The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.4 percent), Alaska (0.6 percent), North Dakota (0.7 percent), Nebraska (0.8 percent) and Colorado (1.0 percent).

****“The most encouraging foreclosure trend reported here is that the inventory of foreclosed properties is almost 20 percent smaller than a year ago,” said Mark Fleming, chief economist for CoreLogic. “This big improvement indicates we are working toward resolving the backlog of the most distressed assets in the shadow inventory.”

****“The rate of foreclosures continues to trend down, albeit at a slower rate as we exit 2012,” said Anand Nallathambi, president and CEO of CoreLogic. “This trend should continue into 2013 and is another positive signal that the gradual healing process in the housing market is gaining traction.”

A New Way To Use Data

*A New Way To Use Data*
**By Tony Garritano**

TonyG***We talk a lot these days about a more data-driven mortgage process. Everybody wants to be more transparent. But data has other uses, as well. For example, intensified investment activity in the single-family rental marketplace has created a strong demand for specialized, analytical rental market data, according to Walter Charnoff, CEO of RentRange. Here’s the scoop on this emerging trend:

****Investment in single-family rentals has increased significantly in the past year, spawning organizations such as the Wall Street Journal and Morgan Stanley to label the segment as a new asset class. “Institutional migration into this sector carries with it an abundance of opportunities, including a liquid disposition channel for servicers; an attractive vehicle for both debt and equity investors to re-enter the U.S. housing market; and a fresh supply of single-family rental inventory for displaced homeowners,” said Charnoff.

****Rental intelligence—that is, rental pricing information based on formal, objective analyses—is an essential element of the single-family rental sector. Servicers require reliable rental information to evaluate investor-centric disposition options. Investors need market-level data to identify performing geographies, and address-level data to gain accurate perspective for purchase decisions. Objective rental estimates enable servicers and investors to achieve optimal pricing on rental homes and to accurately monitor rental portfolio performance.

****RentRange spent five years developing a standardized single-family rental data warehouse, and released a reliable address-level rental AVM. Prior to this, there had been no standardized repository of single-family rental data. Even national MLS information contained far too few transactions to be relevant as a stand-alone resource. Before RentRange, data was subjective, lacked data depth and quality, and failed to produce statistically sound results.

****In response to growing industry demands, RentRange recently released its Macro Data Reports, which are available on a national basis at the MSA, city, county, and zip code levels. Reports are updated on a monthly basis, and are available for purchase at a one-time, bi-annual, quarterly or monthly frequency. A historical data trail of up to forty-eight months is also available upon request. These reports deliver timely, comprehensive market level data called for by participants in the REO-to-Rental marketplace.

Home Prices Are Rising Again

*Home Prices On The Rise Again*
**New Data Emerges**

rising-prices***ZipRealty, an online technology-enabled residential real estate brokerage company, released its ZipRealty Home Price Report, which is based upon authoritative transactional and MLS data in 33 major metros. According to the report, U.S. median home sale prices have increased 11% on a year-over-year basis to $211,312. In 2011, the median home sale price was $190,000, according to data released by ZipRealty.

****While a recent report on existing home sales issued this week by the National Association of Realtors (NAR) found that home prices increased an average of 6.3% nationwide, ZipRealty found that in the 33 markets they and their Powered by Zip partners serve, home sale prices increased an average of 11%. According to ZipRealty’s data, Phoenix, Miami and Palm Beach, Fla., showed the largest increases in home prices on a year-over-year basis.

****Phoenix prices increased 29% from $112,329 to $145,500; Miami prices jumped 23% from $126,000 to $155,000; and Palm Beach housing prices rose 16% from $125,000 to $145,000 last year. Chicago home prices dipped 3% from $165,000 to $160,000 at year’s end; prices in Long Island’s Nassau and Suffolk counties in New York remain unchanged at $350,000; and Brooklyn, N.Y. home prices grew nominally from $420,500 to $421,000, according to ZipRealty data.

****“The metros that suffered the most during the real estate downturn – South Florida and Phoenix – have exhibited the greatest improvement recently,” according to Jamie Wilson, ZipRealty’s Senior Vice President of Technology, who oversees the firm’s research department. “Previously, these metros were characterized by a high volume of housing market distress in the form of foreclosures, and we are now seeing that trend reverse itself with greater volumes of regular re-sale activity even in many of the hardest hit markets.”

New Foreclosure Data Emerges

*New Foreclosure Data Emerges*
**By Tony Garritano**

***According to CoreLogic, there were 58,000 completed foreclosures in the U.S. in October 2012, down from 70,000 in October 2011 representing a year-over-year decrease of 17 percent. On a month-over-month basis, completed foreclosures fell from 77,000 in September 2012 to the current 58,000, representing a decrease of 25 percent. As a basis of comparison, prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 3.9 million completed foreclosures across the country.

****Highlights as of October 2012:

****>> The five states with the highest number of completed foreclosures for the 12 months ending in October 2012 were: California (105,000), Florida (95,000), Michigan (68,000), Texas (59,000) and Georgia (54,000). These five states account for 49.0 percent of all completed foreclosures nationally.

>> The five states with the lowest number of completed foreclosures for the 12 months ending in October 2012 were: South Dakota (19), District of Columbia (64), Hawaii (452), North Dakota (511) and Maine (643).

****>> The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (11.1 percent), New Jersey (7.7 percent), New York (5.3 percent), Illinois (5.0 percent) and Nevada (4.8 percent).

****>> The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.5 percent), Alaska (0.7 percent), North Dakota (0.7 percent), Nebraska (0.8 percent) and South Dakota (1.0 percent).

****“A lower foreclosure inventory is a good indicator of improving housing markets,” said Anand Nallathambi, president and CEO of CoreLogic. “The downward trend in foreclosure inventories over the past year is yet another signal that a recovery in housing is gaining traction.”

****“As a result of completed foreclosures and alternative disposition methods, the foreclosure inventory has declined by 9 percent year-to-date. This is good news for housing markets as we look forward to 2013,” said Mark Fleming, chief economist for CoreLogic.

More Confusing Mortgage Numbers

*More Confusing Mortgage Numbers*
**By Tony Garritano**

***Is the market improving? Is there more pain to be had? Everyday we see different numbers that tell very different stories. So, to make things even more confusing for you, I’m going to share even more numbers with you today. CoreLogic released new analysis showing that 10.8 million, or 22.3 percent, of all residential properties with a mortgage were in negative equity at the end of the second quarter of 2012. Here’s what this means:

****This is down from 11.4 million properties, or 23.7 percent, at the end of the first quarter of 2012. An additional 2.3 million borrowers possessed less than 5 percent equity in their home, referred to as near-negative equity, at the end of the second quarter. Approximately 600,000 borrowers reached a state of positive equity at the end of the second quarter of 2012, adding to the more than 700,000 borrowers that moved into positive equity in the first quarter of this year.

****Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

****Together, negative equity and near-negative equity mortgages accounted for 27.0 percent of all residential properties with a mortgage nationwide in the second quarter, down from 28.5 percent at the end of the first quarter in 2012. Nationally, negative equity decreased from $691 billion at the end of the first quarter in 2012 to $689 billion at the end of the second quarter, a decrease of $2 billion driven in large part by an improvement in house price levels.

****Most borrowers in negative equity are continuing to pay their mortgages. The share of borrowers that were underwater and current on their payments was 84.9 percent at the end of the second quarter in 2012. This is up from 84.8 percent at the end of the first quarter in 2012.

****“The level of negative equity continues to improve with more than 1.3 million households regaining a positive equity position since the beginning of the year,” said Mark Fleming, chief economist for CoreLogic. “Surging home prices this spring and summer, lower levels of inventory, and declining REO sale shares are all contributing to the nascent housing recovery and declining negative equity.”

Forget The Jobs Numbers, Let’s Talk About Positive Trends

*Forget The Jobs Numbers, Let’s Talk Positive Trends*
**By Tony Garritano**

***No surprise, another disappointing jobs report this morning. We created under 100,000 new jobs last month. I guess the election will decide if we stay on this course or try something new. But on a positive note, the CoreLogic Home Price Index (HPI) showed that home prices nationwide, including distressed sales, increased on a year-over-year basis by 3.8 percent in July 2012 compared to July 2011. This was the biggest year-over-year increase since August 2006. On a month-over-month basis, including distressed sales, home prices increased by 1.3 percent in July 2012 compared to June 2012. The July 2012 figures mark the fifth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

****Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 4.3 percent in July 2012 compared to July 2011. On a month-over-month basis excluding distressed sales, home prices increased 1.7 percent in July 2012 compared to June 2012, also the fifth consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

****The CoreLogic Pending HPI indicates that August home prices, including distressed sales, will rise by 4.6 percent on a year-over-year basis from August 2011 and at least 0.6 percent on a month-over-month basis from July 2012. Excluding distressed sales, August house prices are also poised to rise 6.0 percent year-over-year from August 2011 and by 1.3 percent month-over-month from July 2012. The CoreLogic Pending HPI is a proprietary and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes in the most recent month.

****“The housing market continues its positive trajectory with significant price gains in July and our expectation of a further increase in August,” said Mark Fleming, chief economist for CoreLogic. “While the pace of growth is moderating as we transition to the off-season for home buying, we expect a positive gain in price levels for the full year.”