The July Mortgage Monitor, released by LPS, found that while loan origination volume had slowed slightly from May to June, overall activity remained relatively strong. According to LPS Data & Analytics Senior Vice President Herb Blecher, prepayment activity is still largely driving origination volume.
“Prepayment speeds have been impacted by the sharp increase in mortgage interest rates we’ve seen over the last couple months,” said Blecher. “However, even with that increasing interest rate pressure, July’s monthly prepayment rates are still about where they were this time last year, when rates were at historic lows. In fact, they are roughly at the same levels as the heights of the ‘mini refinance booms’ in 2010 – when interest rates were comparable to where they are today and in 2009 where they were even higher.”
He continued to say that as interest rates rise, prepayments and associated originations will decline.
Year to date, 2013 has produced the lowest level of foreclosure starts since 2007. Nearly 50 percent of these repeat foreclosures.
This month’s Mortgage Monitor also leveraged residential real estate transaction data from the LPS Home Price Index to examine trends associated with distressed sales and found that these too were on the decline. For the 12-month period ending in June 2013, distressed sales overall were down nearly 30 percent from the same period ending in June 2012, from 650,000 to 463,000. Short sales declined almost 60 percent accounting for slightly more than 46,000 sales during that timeframe as compared to 104,000 in 2012.