Foreclosure News: Record Prepayment Rate, Delinquency Up
As interest rates tumbled throughout July, prepayments climbed to the highest monthly rate since 2004. July's prepayment activity reached 2.73%, up from 2.65% in June and nearly double the 1.43% rate of the year before.
On the other side of the spectrum, data on outstanding mortgages provided both good and bad news.
The delinquency rate, which does not include loans in foreclosure, fell to 6.91% from June's 7.59% yet remains nearly twice as high as July 2019's 3.46%.
Seriously delinquent borrowers, those late on their payments for 90 days or more but not yet in foreclosure, continued a pace of significant growth in July. Properties in serious delinquency rose to 2.25 million from 1.87 million in June and 444,000 year-over-year. While overall delinquencies keep decreasing as the economy reopens, many borrowers still face financial hardship and will miss payments. However, foreclosure starts climbed once again as taxes and homeowner fees aren't under moratorium.
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