Favorable Rates Bring About Lows in Delinquency
Black Knight Financial Services has good news for the US economy. According to their assessment of distressed properties, the national delinquency rate has dropped down to a level that the nation hasn’t seen in fifteen years. Meanwhile, the serious delinquency rate, representing the number of mortgages that are ninety days or more past due, is lower than it has been since March of 2007. Even loans that are only thirty days or more past due dropped to 4.08% of total mortgage loans in March, representing a decrease of 8.37% from the month before and 12.42% from March of 2015.
It would seem that the recent decline in interest rates is the driving force behind much of this activity. The company reports that low rates have brought about a significant surge in prepayments. The Single Monthly Mortality, or SMM rate, was 1.3% in March, representing an increase of 46% over February. This rate, which gives us the percentage of the principal number of mortgages that were prepaid in the month, is generally a reliable indicator of refinance activity.
