Black Knight Mortgage Monitor for September: "2020 Originations Will Surpass $4 Trillion for First Time Ever"

Black Knight released their Mortgage Monitor report for September today. According to Black Knight, 6.66% of mortgages were delinquent in September, down from 6.88% in August, and up from 3.53% in September 2019. Black Knight also reported that 0.34% of mortgages were in the foreclosure process, down from 0.48% a year ago.

This gives a total of 7.00% delinquent or in foreclosure.

Press Release: Rate Lock Data Suggests 2020 Originations Will Surpass $4 Trillion for First Time Ever; Q3 Originations Likely to Set New Quarterly Records

Today, the Data & Analytics division of Black Knight, Inc. (NYSE:BKI) released its latest Mortgage Monitor Report, based upon the company’s industry-leading mortgage performance, housing and public records datasets. This month, the company looked into rate lock data – historically a good indicator of lending activity – and found that Q3 2020 mortgage originations are set to break quarterly records in terms of refinance, purchase and total lending volumes. As Black Knight Data & Analytics President Ben Graboske explained, the data and market conditions also suggest that origination volumes could remain elevated into November and beyond.

“Rate lock data from Black Knight’s Compass Analytics division shows that Q3 2020 mortgage originations are on track to break quarterly records across the board and remain strong moving into Q4,” said Graboske. “This suggests that origination and prepayment activity will likely remain elevated well into Q4 2020. September lock activity held relatively level with August, but through October 19, lock activity overall is up 4% from the month prior – with purchase locks up 6% and refinance locks up 3% thus far. Interest rates setting new record lows in mid- and late October will likely continue to fuel lock activity in coming weeks.

“Assuming a 45-day lock-to-close period, not only could Q3 2020 set quarterly records for refinance, purchase and total origination volumes alike, but that volume could remain at or near peak levels through November 2020 – if not longer. Estimated origination volumes based on underlying locks suggest both Q3 refinance and total originations could be up 25% or more from Q2 while purchase lending could be up by 35% or more. This would push 2020 purchase lending to the highest level since 2005 and both refinance lending and total origination volumes to their highest levels ever. Indeed, total lending in 2020 is well on its way to easily eclipse the $4 trillion mark for the first time in history.”
emphasis added

Click on graph for larger image.

Here is a graph from the Mortgage Monitor that shows the status of loans that have left forbearance by loan product.

From Black Knight:

Not only have forbearance take-up rates varied widely by loan product, but the rate at which borrowers are leaving such plans has varied greatly as well

• The GSEs have seen the highest removal rates, with 57% of borrowers having left their plans, 42% now re-performing on their loans and another 10% having paid off their loans in full

• VA loans show an even higher payoff rate at 11%, but only 21% of VA borrowers are re-performing and only 46% have left their plans

• Similarly, 45% of FHA borrowers have left forbearance plans, while 27% are re-performing and only 6% have paid off their mortgages in full

There is much more in the mortgage monitor - especially related to forbearance.