Black Knight Mortgage Monitor
Mortgage Market Performance Observations

Data as of January, 2014 Month-end

Black Knight F...
January 2014 Data Summary
January Summary Statistics

Delinquencies
Foreclosure
Foreclosure Starts
Seriously Delinquent (9...
Focus Points
 Focus 1: Originations and Sales, Refinance
opportunities and HARP update
 Focus 2: Home Equity origination...
Focus Point 1: Originations and Sales, Refinance
opportunities and HARP update

 Origination volume is the lowest since 2...
Origination volume is the lowest since 2008
with further declines expected
Gov’t
Backed
2009

91%

3.2%

2010

89%

4.5%

...
Prepayment speeds signal more
drops in refinance related originations

Black Knight Financial Services

6
Increased cash purchases have been
supporting overall property sales

Monthly sales were up 3.7% year
over year, with full...
“Refinancible” portion of the market
continues to decline

In the Money and Current =
5,119k loans ($488B UPB)
Lowering Cr...
The number of loans eligible for HARP under
current standards has dropped significantly

HARP Eligible and “In the Money”
...
High LTV GSE originations (HARP and Streamlines)
have dropped sharply since mid-2013

HARP volume
down 70% year
over year*...
Outside of Nevada and Florida, mid-western states
have the highest % of HARP eligibility in the nation

Black Knight Finan...
NY, OR and TX have among the highest % of loans
that may be eligible for traditional refinance

Black Knight Financial Ser...
Focus Point 2: Home Equity
originations, quality and performance

 2013 was the first year of increased HE
originations s...
2013 was the first year of increased HE originations
since 2006 (though volumes are still very low)

Total HE Volumes are ...
HE (and particularly LOC) originations are
concentrated in “super-prime” borrowers

Black Knight Financial Services

15
HELOC performance in recent vintages is pristine

Black Knight Financial Services

16
HE loan sizes are beginning to increase again

Black Knight Financial Services

17
HELOCs that have begun to amortize are
an ongoing cause for concern

New problem loan rates for
pre-2004 HELOC vintages
ar...
Focus Point 3: Pipeline update –
foreclosure start and sale focus

 Foreclosure starts are at multi-year lows with a larg...
Foreclosure starts continue to hit multi-year lows

Black Knight Financial Services

20
The recent drop in foreclosure starts primarily
impacted the newly non-current loans

Black Knight Financial Services

21
Foreclosure starts as a percentage of seriously
delinquent inventory are the lowest on record

Black Knight Financial Serv...
The ratio of serious deterioration to foreclosure
starts is at the highest level since 2010

Black Knight Financial Servic...
After holiday moratoria, January saw an
increase in foreclosure sale activity

Black Knight Financial Services

24
DQs follow typical seasonal pattern while fewer FC
starts and more sales push FC inventory lower

Black Knight Financial S...
BKFS Mortgage Monitor
Appendix

Data as of January, 2014 Month-end

Black Knight Financial Services
January 2014 Data Summary
January Summary Statistics

Delinquencies
Foreclosure
Foreclosure Starts
Seriously Delinquent (9...
Seven of the top 10 states for total non-current are
judicial

State

National

Del %

FC %

6.3%

MS
13.4%
NJ
*
7.1%
FL
*...
Loan counts and
average days delinquent

Black Knight Financial Services

29
BKFS Mortgage Monitor
Disclosures: Product / Metric Definitions and Market Sizing

Black Knight Financial Services
Disclosure Page: Product Definitions

*Conforming limits do not account for temporary or high-cost area
increases.

Black ...
Disclosure Page: Metrics Definitions
 Total Active Count: All active loans as of month-end including loans in any state o...
Disclosure Page: Extrapolation Methodology
Mortgage statistics are scaled to estimate the total market
performance based o...
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January 2014 Mortgage Monitor

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January 2014 Mortgage Monitor

  1. 1. Black Knight Mortgage Monitor Mortgage Market Performance Observations Data as of January, 2014 Month-end Black Knight Financial Services
  2. 2. January 2014 Data Summary January Summary Statistics Delinquencies Foreclosure Foreclosure Starts Seriously Delinquent (90+) or in Foreclosure New Originations (data as of Dec-13) Jan-14 6.27% 2.35% 94,075 Monthly Change -2.96% -5.32% -10.2% YTD Change 0.0% 0.0% 0.0% Yearly Change -10.7% -31.2% -36.3% 4.92% -2.2% 0.0% -24.0% 347K 0.9% -47.1% -57.7% Jan-14 6.27% 2.35% 94,075 Dec-13 6.47% 2.48% 104,759 Nov-13 6.45% 2.50% 104,939 Oct-13 6.28% 2.54% 118,837 Sep-13 6.46% 2.63% 108,953 Aug-13 6.20% 2.66% 107,552 Jul-13 6.41% 2.82% 112,849 Jun-13 6.68% 2.93% 109,042 May-13 6.08% 3.05% 116,812 Apr-13 6.21% 3.17% 127,496 Mar-13 6.59% 3.37% 121,012 Feb-13 6.80% 3.38% 131,826 Jan-13 7.03% 3.41% 147,593 4.92% 5.03% 347K 5.05% 344K 5.10% 493K 5.26% 516K 5.22% 657K 5.53% 747K 5.62% 778K 5.71% 834K 5.95% 797K 6.29% 779K 6.34% 714K 6.48% 776K 12 Month History Black Knight Financial Services 347K 344K 493K 516K 657K 747K 778K 797K 779K 714K 776K 6.27% 6.47% 6.45% 6.28% New Originations 6.46% 6.20% 6.41% 6.68% 6.08% 6.21% 6.59% 6.80% 7.03% Total Delinquencies 834K Delinquencies Foreclosure Foreclosure Starts Seriously Delinquent (90+) or in Foreclosure New Originations 2
  3. 3. Focus Points  Focus 1: Originations and Sales, Refinance opportunities and HARP update  Focus 2: Home Equity originations, quality and performance  Focus 3: Pipeline update – foreclosure start and sale focus Black Knight Financial Services 3
  4. 4. Focus Point 1: Originations and Sales, Refinance opportunities and HARP update  Origination volume is the lowest since 2008, with prepayment speeds signaling more drops in refinance related originations  Increased cash purchases are supporting property sales, which are still up vs. 2012  The number of “refinancible” mortgages continues to decline with less incentive for both traditional and HARP eligible borrowers  As a result HARP and streamline activity have also dropped sharply since mid-2013 Black Knight Financial Services 4
  5. 5. Origination volume is the lowest since 2008 with further declines expected Gov’t Backed 2009 91% 3.2% 2010 89% 4.5% 2011 87% 6.5% 2012 84% 7.0% 2013 Black Knight Financial Services Investor Property 83% 9.0% 5
  6. 6. Prepayment speeds signal more drops in refinance related originations Black Knight Financial Services 6
  7. 7. Increased cash purchases have been supporting overall property sales Monthly sales were up 3.7% year over year, with full year ‘13 up 8.4% Black Knight Financial Services 7
  8. 8. “Refinancible” portion of the market continues to decline In the Money and Current = 5,119k loans ($488B UPB) Lowering Credit Score to 700 adds ~829k loans Black Knight Financial Services 8
  9. 9. The number of loans eligible for HARP under current standards has dropped significantly HARP Eligible and “In the Money” 709K (vs. 2,306K in Jan 2013) HARP 3.0 could add over 2.5M more (assuming non-GSE eligibility) Black Knight Financial Services 9
  10. 10. High LTV GSE originations (HARP and Streamlines) have dropped sharply since mid-2013 HARP volume down 70% year over year* *FHFA Refinance Report – Nov 13 Black Knight Financial Services 10
  11. 11. Outside of Nevada and Florida, mid-western states have the highest % of HARP eligibility in the nation Black Knight Financial Services 11
  12. 12. NY, OR and TX have among the highest % of loans that may be eligible for traditional refinance Black Knight Financial Services 12
  13. 13. Focus Point 2: Home Equity originations, quality and performance  2013 was the first year of increased HE originations since 2006 (though volumes are still lower than ‘10)  HELOC performance in recent vintages is pristine with origination activity concentrated in “superprime” borrowers while loan sizes have begun to increase again  Focus should remain on HELOCs that have begun to amortize Black Knight Financial Services 13
  14. 14. 2013 was the first year of increased HE originations since 2006 (though volumes are still very low) Total HE Volumes are still down over 90% from 2006 and about even with 2009 Black Knight Financial Services 14
  15. 15. HE (and particularly LOC) originations are concentrated in “super-prime” borrowers Black Knight Financial Services 15
  16. 16. HELOC performance in recent vintages is pristine Black Knight Financial Services 16
  17. 17. HE loan sizes are beginning to increase again Black Knight Financial Services 17
  18. 18. HELOCs that have begun to amortize are an ongoing cause for concern New problem loan rates for pre-2004 HELOC vintages are up 27% year over year Black Knight Financial Services 18
  19. 19. Focus Point 3: Pipeline update – foreclosure start and sale focus  Foreclosure starts are at multi-year lows with a large drop in early stage starts (potentially CFPB and NMS rules related activity)  While starts have declined, seriously delinquent deterioration has been trending slightly upwards over the last six months  Foreclosure sales increased after holiday lull  The combination of lower starts and increased sales have pushed foreclosure inventory to the lowest level since 2008 Black Knight Financial Services 19
  20. 20. Foreclosure starts continue to hit multi-year lows Black Knight Financial Services 20
  21. 21. The recent drop in foreclosure starts primarily impacted the newly non-current loans Black Knight Financial Services 21
  22. 22. Foreclosure starts as a percentage of seriously delinquent inventory are the lowest on record Black Knight Financial Services 22
  23. 23. The ratio of serious deterioration to foreclosure starts is at the highest level since 2010 Black Knight Financial Services 23
  24. 24. After holiday moratoria, January saw an increase in foreclosure sale activity Black Knight Financial Services 24
  25. 25. DQs follow typical seasonal pattern while fewer FC starts and more sales push FC inventory lower Black Knight Financial Services 25
  26. 26. BKFS Mortgage Monitor Appendix Data as of January, 2014 Month-end Black Knight Financial Services
  27. 27. January 2014 Data Summary January Summary Statistics Delinquencies Foreclosure Foreclosure Starts Seriously Delinquent (90+) or in Foreclosure New Originations (data as of Dec-13) Jan-14 6.27% 2.35% 94,075 Monthly Change -2.96% -5.32% -10.2% YTD Change 0.0% 0.0% 0.0% Yearly Change -10.7% -31.2% -36.3% 4.92% -2.2% 0.0% -24.0% 347K 0.9% -47.1% -57.7% Jan-14 6.27% 2.35% 94,075 Dec-13 6.47% 2.48% 104,759 Nov-13 6.45% 2.50% 104,939 Oct-13 6.28% 2.54% 118,837 Sep-13 6.46% 2.63% 108,953 Aug-13 6.20% 2.66% 107,552 Jul-13 6.41% 2.82% 112,849 Jun-13 6.68% 2.93% 109,042 May-13 6.08% 3.05% 116,812 Apr-13 6.21% 3.17% 127,496 Mar-13 6.59% 3.37% 121,012 Feb-13 6.80% 3.38% 131,826 Jan-13 7.03% 3.41% 147,593 4.92% 5.03% 347K 5.05% 344K 5.10% 493K 5.26% 516K 5.22% 657K 5.53% 747K 5.62% 778K 5.71% 834K 5.95% 797K 6.29% 779K 6.34% 714K 6.48% 776K 12 Month History Black Knight Financial Services 347K 344K 493K 516K 657K 747K 778K 797K 779K 714K 776K 6.27% 6.47% 6.45% 6.28% New Originations 6.46% 6.20% 6.41% 6.68% 6.08% 6.21% 6.59% 6.80% 7.03% Total Delinquencies 834K Delinquencies Foreclosure Foreclosure Starts Seriously Delinquent (90+) or in Foreclosure New Originations 27
  28. 28. Seven of the top 10 states for total non-current are judicial State National Del % FC % 6.3% MS 13.4% NJ * 7.1% FL * 6.7% NY * 6.6% LA * 9.8% ME * 6.9% RI 8.7% AL 9.5% CT * 6.7% MD * 7.4% IN * 8.0% PA * 7.5% AR 8.5% DE * 7.5% NV 6.9% OH * 7.3% WV 8.4% * - Indicates Judicial State 2.3% 2.0% 7.0% 7.0% 5.6% 2.1% 4.6% 2.8% 1.3% 3.8% 3.1% 2.4% 2.7% 1.7% 2.6% 3.1% 2.6% 1.3% Black Knight Financial Services NonCurr % 8.6% 15.3% 14.1% 13.7% 12.2% 12.0% 11.6% 11.5% 10.9% 10.5% 10.5% 10.4% 10.3% 10.2% 10.1% 9.9% 9.9% 9.7% Yr/Yr Change in NC% -17.4% -9.1% -13.5% -27.8% -9.5% -5.3% -9.3% -8.3% -4.7% -14.6% -16.5% -12.1% -9.6% -15.1% -10.7% -30.8% -14.3% -8.4% State Del % FC % National 6.3% 2.3% GA TN IL HI SC MA OK VT KY NC NM TX MO WI DC MI NH 8.5% 8.6% 6.2% 4.6% 7.2% 7.2% 6.5% 5.5% 6.5% 7.1% 5.5% 7.1% 6.8% 5.9% 5.1% 6.5% 6.2% 1.2% 1.1% 3.4% 5.0% 2.3% 1.8% 2.3% 3.0% 1.9% 1.3% 2.6% 0.9% 0.9% 1.8% 2.3% 0.9% 1.1% * * * * * * * * NonCurr % 8.6% 9.7% 9.7% 9.6% 9.5% 9.5% 9.1% 8.8% 8.5% 8.4% 8.4% 8.1% 8.0% 7.8% 7.6% 7.5% 7.4% 7.3% Yr/Yr Change in NC% -17.4% -16.6% -10.2% -22.5% -12.4% -14.6% -6.6% -9.9% -7.5% -10.7% -16.6% -12.5% -8.1% -8.2% -15.3% -16.0% -15.4% -10.2% State Del % National KS IA WA OR UT VA ID NE CA AZ MN WY MT CO AK SD ND FC % 6.3% * * * * * 2.3% 5.9% 5.0% 4.5% 3.8% 5.0% 5.2% 4.0% 4.9% 4.4% 4.4% 3.9% 4.0% 3.3% 3.7% 3.6% 3.1% 2.1% 1.3% 1.9% 1.8% 2.5% 1.0% 0.7% 1.7% 0.8% 0.8% 0.8% 0.7% 0.6% 1.0% 0.6% 0.6% 0.9% 0.7% NonCurr % 8.6% 7.2% 6.9% 6.4% 6.3% 6.1% 5.9% 5.7% 5.7% 5.2% 5.2% 4.6% 4.5% 4.4% 4.3% 4.2% 4.0% 2.7% Yr/Yr Change in NC% -17.4% -9.7% -11.6% -27.4% -17.4% -19.7% -15.0% -20.7% -8.8% -29.2% -25.0% -16.5% -3.0% -12.3% -16.9% -11.0% -11.6% -14.5% 28
  29. 29. Loan counts and average days delinquent Black Knight Financial Services 29
  30. 30. BKFS Mortgage Monitor Disclosures: Product / Metric Definitions and Market Sizing Black Knight Financial Services
  31. 31. Disclosure Page: Product Definitions *Conforming limits do not account for temporary or high-cost area increases. Black Knight Financial Services 31
  32. 32. Disclosure Page: Metrics Definitions  Total Active Count: All active loans as of month-end including loans in any state of delinquency or foreclosure. Post-sale loans and loans in REO are excluded from the total active count.  Delinquency Statuses (30, 60, 90+, etc): All delinquency statuses are calculated using the MBA methodology based on the payment due date provided by the servicer. Loans in foreclosure are reported separately and are not included in the MBA days delinquent.  90 Day Defaults: Loans that were less than 90 days delinquent in the prior month and were 90 days delinquent, but not in foreclosure, in the current month.  Foreclosure Inventory: The servicer has referred the loan to an attorney for foreclosure. Loans remain in foreclosure inventory from referral to sale.  Foreclosure Starts – Any active loan that was not in foreclosure in the prior month that moves into foreclosure inventory in the current month.  Non-Current: Loans in any stage of delinquency or foreclosure.  Foreclosure Sale / New REO: Any loan that was in foreclosure in the prior month that moves into post-sale status or is flagged as a foreclosure liquidation.  REO: The loan is in post-sale foreclosure status. Listing status is not a consideration, this includes all properties on and off the market.  Deterioration Ratio: The ratio of the percentage of loans deteriorating in delinquency status vs. those improving. Black Knight Financial Services 32
  33. 33. Disclosure Page: Extrapolation Methodology Mortgage statistics are scaled to estimate the total market performance based on coverage within the McDash database. The following table contains information on market coverage by product as of June 2012; extrapolations also include adjustments for vintage and as of date. Additional information is available upon request. Black Knight Financial Services 33

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