Black Knight: Mortgage Monitor July 2021

  • Driven by the booming housing market, exploitable equity – the amount available to homeowners before reaching a maximum combined loan-to-value ratio (CLTV) of 80% – has jumped almost 40% from the previous year. ‘last year.

  • At $ 9.1 trillion in total – yet another record high – the average mortgage holder now has $ 173,000 in workable equity, an increase of $ 20,000 from the end of the first quarter.

  • Less than 3% of mortgage holders have less than 10% equity – the lowest share ever – with CLTV’s overall weighted average now at 46%, the lowest loan-to-value leverage on record .

  • About 98% of borrowers in active forbearance have at least 10% equity, compared to the Great Recession where 40% of all mortgage holders had less than 10% equity with 28% fully subscribed

  • Even adding 18 months of principal, interest, taxes and deferred insurance payments to the total amount of debt, only 7% of borrowers withholding would have less than 10% of their home equity.

  • More than $ 63 billion in equity was withdrawn via 1.1 million cash-out refinances initiated in the second quarter, the largest quarterly volume since mid-2007

JACKSONVILLE, Florida – September 8, 2021 – Today the Data analysis division of Dark Knight, Inc. (NYSE: BKI) released its latest Mortgage monitoring report, based on the company’s industry-leading mortgage, real estate and public records data sets. With comprehensive second quarter data and analyzed, this month’s report examines incredible growth in the nation’s levels of workable equity – the amount available to homeowners with mortgages to borrow on while retaining at least 20% equity. in their homes. According to Black Knight Data & Analytics President Ben Graboske, the continued heat in the housing market has driven levels of exploitable equity to all-time highs in the second quarter of 2021.

“Workable equity increased 37% year-on-year in the second quarter of 2021, driven by the increase in home values ​​during the quarter,” Graboske said. “According to our HPI Black Knight, at the end of June, home values ​​were up almost 20% from the previous year and 7.4% in the second quarter alone. As a result, already at a record high of $ 8.1 trillion at the end of the first quarter, U.S. homeowners with mortgages earned an additional $ 1 trillion in workable equity in the second quarter alone. This is by far the strongest growth we’ve ever seen and equates to some $ 173,000 in equity available to the average mortgage holder, an increase of $ 20,000 in just three months.

“A rising tide lifts all boats as they say, including forbearance owners – whose ability to resume making payments when forbearance ends will likely be a key driver of the country’s overall economic recovery COVID-19 . Some 98% of forborne homeowners now have at least 10% of their home equity. Even when we add 18 months of canceled payments – including principal, interest, taxes and insurance – the share with less than 10% equity only jumps to 7%, or roughly 135,000 homeowners. This is a radically different dynamic from the worst of the Great Recession, when over 40% of all mortgage holders had less than 10% equity and 28% were completely under water. These strong equity positions should help limit the volume of distressed capital inflows into the real estate market and provide a strong incentive for homeowners to start making their mortgage payments again, even if they need to be curtailed by a modification.

Looking at the original second-quarter data, the report also found signs that owners might be less hesitant to operate their available equity stores. While mortgage originations fell 5% from the first quarter of 2021, the fourth consecutive quarter with more than $ 1 trillion in originations was marked and the fifth consecutive quarter with at least 2.2 million. refinancings, including 1.1 million withdrawal refinances, the largest quarterly volume of this type in nearly 15 years. However, Black Knight retention data shows that cash refinances remain the most difficult commodity to hold in a provider’s portfolio. Additionally, recent expansions and enhancements to McDash’s Mortgage Performance Database have given Black Knight greater visibility into the performance of banks compared to non-banks, finding that the latter are doing much better. to retain customers in general, but to cash in refinancing customers in particular. Much more detail can be found in July 2021’s Black Knight Mortgage monitoring report.

About the Mortgage Monitor

Black Knight’s Data & Analytics division manages the nation’s leading repository of lending-level residential mortgage data and performance information covering the majority of the global market, including tens of millions of loans across the country. spectrum of credit products and over 160 million historical records. . The combined home price and real estate data overview from Black Knight HPI and Collateral Analytics provides one of the most comprehensive, accurate and timely home price metrics available, covering 95% of US residential properties up to level. postal code. Additionally, the company maintains one of the strongest public property records databases available, covering 99.9% of the U.S. population and households in more than 3,100 counties.

Black Knight’s research experts carefully analyze this data to produce a summary supplemented with dozens of tables and charts that reflect trends and point observations for the Monthly Mortgage Watch Report. To view the full report, visit: https://www.blackknightinc.com/data-reports/

About Black Knight

Black Knight, Inc. (NYSE: BKI) is an award-winning software, data and analytics company that drives innovation in the mortgage lending and services and real estate industries, as well as in capital markets and secondary. Businesses leverage our robust integrated solutions throughout the homeownership lifecycle to help retain existing customers, gain new customers, mitigate risk and operate more efficiently.

Our customers rely on our proven, comprehensive and scalable products and our unwavering commitment to providing superior customer support to achieve their strategic goals and better serve their customers. For more information on Black Knight, please visit www.blackknightinc.com/.

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