Lower Credit Borrowers and Older Loans Buoy Prepayment Speeds

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Posted To: MND NewsWire

Among the areas of focus in the most recent edition of Lender Processing Service's (LPS) Mortgage Monitor are the metrics surrounding the market for refinancing. In the report, which covers data for April which precedes the recent interest rate increases, LPS first looked at prepayment speeds which it calls a good historic indicator of refinance activity. It found that these speeds, while down from recent highs, remained elevated, particularly among older loan vintages and lower credit borrowers. This is consistent with the view that lenders--having tightened guidline overlays shutting less qualified borrowers out of the market when rates bottomed--would eventually "move on" to loan files that weren't considered low-hanging fruit until rates began rising in 2013. The relatively hotter purchase...(read more)

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Source: http://www.mortgagenewsdaily.com/06062013_lps_mortgage_monitor.asp

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