Lockdown Activity Suggests Q1 2021 Refi Origins Stay Close to All-Time Highs As Rate Boosts Cloud Q2 Outlook; Service agent retention hits new low
JACKSONVILLE, Fla., March 8, 2021 / PRNewswire / – Today, Data analysis division of Black Knight, Inc. (NYSE: BKI) published its latest Mortgage Monitor Report, based on the company’s best mortgage, real estate, and public records data sets. This month’s report takes a look at original 2020 volumes as well as rate foreclosure data from Black Knight’s secondary marketing technology division to get a feel for the market situation as rates begin. to increase. According to Black Knight Data & Analytics President Ben Graboske, despite interest rates which recently climbed over 3.2% according to daily tracking data from the company’s Optimal Blue Mortgage Market Index, the First quarter 2021 refinancing loan volumes are expected to remain close to the record for fourth quarter 2020- breaking high.
“About 2.8 million homeowners refinanced their mortgages in the last quarter of 2020, which saw a record $ 869 billion in refinancing loans,” said Graboske. “Assuming a 45-day lock-to-close timeframe, Black Knight’s daily rate lockout data through mid-February suggests refi activity may remain stable in Q1 2021. Of course, that is. before a recent 30-year spike in rates is expected to start impacting loan volumes closed at the end of the first quarter or the start of the second quarter. Yet by the end of March, 2.8 Million more homeowners will have taken advantage of near-record rates to refinance their mortgages.It is important to remember that this would be associated with a 25% reduction from Q4 2020 in purchase loans, which translates into an overall quarterly decrease of 10%.
“With the rise in rates, the incentives to refinance have been drastically reduced. Just under 13 million high-quality refinancing applicants remain in the market – a drop of almost 30% in the past three weeks. , the maintenance of what is now a declining number of refinancing borrowers remains at an all-time low, with only 18% of them retained by their managers. About 2.3 million borrowers have not been retained. in the fourth quarter of 2020 alone. The current rate volatility underscores the critical nature of precise, strategic pricing and advanced loyalty analytics to help identify borrowers who still have incentives and are transacting in the market. “
Exploring the latest retention data provides an interesting context. The rate / term refinancing was retained at a much higher rate (23%) than those withdrawing liquidity within the framework of the transaction (11%). Borrowers who took out their previous mortgage in 2019 continued to generate the highest volume of refinancing origins (20%) and were also retained at one of the highest rates (24%). Those who took out their previous mortgage earlier in 2020 generated 8% of all Q4 2020 refinances, representing a significant volume of early refinancing activity. Among the higher credit quality GSE rate / term refinances, borrowers who left their manager received a rate more than an eighth of a percent lower than those who refinanced and stayed with their current manager. Much more detail can be found in January 2021’s Black Knight Mortgage Monitor Report.
About the Mortgage MonitorBlack Knight’s Data & Analytics division manages the leading national repository of loan-level residential mortgage data and performance information covering the majority of the global market, including tens of millions of loans across the spectrum. credit products and over 160 million historical records. . The combined information from Black Knight HPI and real estate price data and real estate prices from Collateral Analytics provide one of the most comprehensive, accurate and timely measures of home prices available, covering 95% of residential properties in Canada. United States up to zip code level. Additionally, the company maintains one of the strongest public property registry databases available, covering 99.9% of the U.S. population and households in more than 3,100 counties.
Black Knight’s research experts carefully analyze this data to produce a summary supplemented with dozens of tables and charts that reflect trends and one-off observations for the Mortgage Monitor monthly report. To view the full report, visit: https://www.blackknightinc.com/data-reports/
About Black KnightBlack Knight, Inc. (NYSE: BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and services and real estate industries, as well as in the financial and secondary markets. Businesses leverage our robust and integrated solutions throughout the homeownership lifecycle to help retain existing customers, gain new customers, mitigate risk and operate more efficiently.
Our customers rely on our proven, comprehensive and scalable products and our unwavering commitment to providing superior customer support to achieve their strategic goals and better serve their customers. For more information on Black Knight, please visit www.blackknightinc.com/.
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SOURCE Black Knight, Inc.