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Five Housing Headwinds; Mortgage Originations Lowest Since 2010; Refinancible Loan Percentage Collapses; Payment Shock

By Ilene
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Courtesy of Mish.

Black Knight Financial Services, formerly LPS, released its latest Mortgage Monitor Forecast.

Key Highlights

  • Mortgage originations are at the lowest levels in almost four years
  • Prepayment/refi activity indicates another drop coming
  • Higher interest rates slow refinance activity
  • Quality of the loans originated in 2013 have made it are the best performing vintage on on record.
  • Home equity originations are up significantly since a year ago: total HE lending is up 70%, while volume on 2nd mortgages has more than doubled
  • Population of “refinancible” loans continues to shrink – Only 5.9M loans meet broadly defined criteria for refinancing, down 4M since December 2012.
  • Delinquencies continue to rise among HELOCs that began amortizing
  • High risk of “payment shock” in the coming three years

Here are some charts. 
Anecdotes in red are mine. Click on any chart for sharper image.

Origination Volume Lowest Since 2010

Refi Activity Collapses with Rising Rates

2013 Best Vintage on Record

Home Equity Loans Up

…

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