Mortgages set 20-year record with $ 1.1 billion in second quarter

U.S. lenders issued a staggering $ 1.1 trillion in home loans between April and June, marking the largest quarter in at least two decades, according to the mortgage data company. Black Knight. The record quarter highlights the growing disparity between homeowners who are willing to take advantage of perfect conditions and those who are simply desperate not to lose their home.

The surge in activity is mainly due to a rush to refinance. With rates hitting historic lows, homeowners tested the capacity limits of lenders with more than 2.3 million refinances in the quarter, the highest number in nearly 17 years. Seventy percent of total loans issued in dollar value in the second quarter were refinancings, according to Black Knightthe data of.

Most took advantage of the 3% interest rate to reduce monthly payments; Loans with withdrawal included only 3 of 10 refi trades in the second quarter, Black Knight found.

The third quarter promises to be even wilder – blockades on refis that are expected to close in the third quarter are up 20% from the second quarter.

“With market conditions as they are and given the recent postponement of the 50 basis point fee on GSE refinances until December, we expect near record interest rates to continue to support the market, ”he added. Ben Graboske, President of Data and Analytics for Black Knight, said in a statement. “After all, there are still nearly 18 million homeowners with good credit and at least 20% equity who could reduce their current first lien rate by at least 0.75% by refinancing.”

And while the buying market was down 8% largely for reasons related to the coronavirus, rate locks suggest pent-up demand could lead to record third quarter activity.

“The buying locks in the third quarter of 2020 have already offset losses from a second quarter impacted by COVID – and then some – based on normal seasonal expectations,” Graboske said. “In fact, rate freezes suggest we could see third-quarter purchase loans break typical seasonal patterns and rise 30-40%, pushing us to a new high.”

The growing inequalities in America, however, is also highlighted in Black Knightthe second quarter report. Although unemployment fell to 8.4% in August, more than 11 million jobs have been missing since March. To make matters worse, additional federal unemployment benefits totaling $ 600 per week expired in July. The markets with the largest increases in delinquency in July were New York, New Orleans, Las Vegas, Orlando and Miami.

Loans in arrears for more than 90 days – known as “serious delinquencies” – have increased 450% from pre-pandemic levels, although total loans in arrears have increased. abstention continued to decline from the peak reached in May.

Of the 3.9 million homeowners still in abstention, 2.85 million saw the duration of their forbearance plan extended while 1.07 million still remain in their original term, according to Black Knight. Homeowners with less equity and unfavorable credit were more than twice as likely to have signed up for forbearance plans.


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