Black Knight's May Mortgage Monitor: 6.5 Million Borrowers Could Save $1.66 Billion Monthly Via Refinancing; Interest Rate Jumps Would Strain Home Affordability

- 6.1 million borrowers could likely qualify for and benefit from a traditional refinance; additional 450,000 are HARP-eligible

- Over three million borrowers could save at least $200/month via traditional refis; about 550,000 would save $500 or more

- Monthly mortgage payment on a median-priced home today similar to 2000-2003; down $400 from 2006 levels

- One percent rise in interest rates would impact home affordability as much as a 13 percent increase in home prices

Jul 06, 2015, 09:00 ET from Black Knight Financial Services

JACKSONVILLE, Fla., July 6, 2015 /PRNewswire/ -- Today, the Data and Analytics division of Black Knight Financial Services, Inc. (NYSE: BKFS) released its latest Mortgage Monitor Report, based on data as of the end of May 2015. This month, Black Knight looked into the current population of refinanceable borrowers and found that, between traditional and HARP programs, approximately 6.5 million borrowers could likely both qualify for and benefit from refinancing. As Black Knight Data & Analytics Senior Vice President Ben Graboske explained, these refinance opportunities could result in significant monthly savings for qualifying borrowers.

"By looking at current interest rates on existing 30-year mortgages and applying broad-based underwriting criteria, we found that approximately 6.1 million borrowers make good candidates for traditional refinancing," said Graboske. "An additional 450,000 meet HARP-eligibility guidelines. For both groups, the potential monthly savings could be substantial. Some 550,000 American homeowners with a mortgage could save $500 or more each month by refinancing at today's rates. Over three million could save at least $200 per month. All told, in the aggregate we're looking at about $1.5 billion that American homeowners could be saving every month through a traditional refinance. Add in the 450,000 HARP-eligible borrowers and that figure swells to about $1.66 billion in savings every month - almost $20 billion a year. It's important to remember how rate-sensitive this population is, too; if rates go up just half a percentage point, 2.6 million people fall out of that refinanceable population."

Leveraging data from the Black Knight Home Price Index, along with Census Bureau income figures, Black Knight also looked into the current state of home affordability. Even after two and a half years of consistent home price increases, payment-to-income ratios are still below pre-bubble levels nationally and far beneath those at the peak of the market.

"Today, the principle and interest payment on a median-priced home is equivalent to 21 percent of median gross monthly income nationally," Graboske said. "In the years before the housing bubble that ratio was closer to 25-26 percent, and at the height of the market in 2006, it peaked as high as 33 percent. The monthly payment on a median-priced home is $400 less today than it was in 2006. But, if we look at an example scenario where interest rates rise by 75 basis points a year and home prices appreciate by 3 percent annually, the payment-to-income ratio would be at 27 percent by 2017. In this scenario, the payment on the median-priced home would increase by $116 per month over the next year and $241 per month by March 2017. Overall, the impact of increasing interest rates on home affordability warrants ongoing attention.  With all else being equal, a one percent increase in interest rates would impact affordability as much as a 13 percent jump in home prices."

As was reported in Black Knight's most recent First Look release, other key results include:

Total U.S. loan delinquency rate:                  

4.96%

Month-over-month change in delinquency rate: 

3.95%

Total U.S. foreclosure pre-sale inventory rate:   

1.49%

Month-over-month change in foreclosure pre-sale inventory rate:  

-1.28 %

States with highest percentage of non-current* loans:           

MS, NJ, LA, NY, ME

States with the lowest percentage of non-current* loans:        

MT, MN, SD, CO, ND

States with highest percentage of seriously delinquent** loans: 

MS, RI, LA, AL, AR

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. **Seriously delinquent loans are those past-due 90 days or more. Totals are extrapolated based on Black Knight Financial Services' loan-level database of mortgage assets.

About the Mortgage Monitor The Data and Analytics division of Black Knight Financial Services manages the nation's leading repository of loan-level residential mortgage data and performance information on approximately two-thirds of the overall market, including tens of millions of loans across the spectrum of credit products and more than 140 million historical records. The company's research experts carefully analyze this data to produce a summary supplemented by dozens of charts and graphs that reflect trend and point-in-time observations for the monthly Mortgage Monitor Report. To review the full report, visit: http://www.BKFS.com/CorporateInformation/NewsRoom/Pages/Mortgage-Monitor.aspx

About Black Knight Financial Services, Inc. Black Knight Financial Services (NYSE: BKFS), a Fidelity National Financial (NYSE: FNF) company, is the mortgage and finance industries' leading provider of integrated technology, data and analytics solutions that facilitate and automate many of the business processes across the mortgage lifecycle.

Black Knight Financial Services is committed to being the premier business partner that lenders and servicers rely on to achieve their strategic goals, realize greater success and better serve their customers by delivering best-in-class technology, services and insight with a relentless commitment to excellence, innovation, integrity and leadership. For more information on Black Knight Financial Services, please visit www.BKFS.com.

SOURCE Black Knight Financial Services



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