Magazine article Mortgage Banking

Black Knight Finds Average Loan Age Highest on Record

Magazine article Mortgage Banking

Black Knight Finds Average Loan Age Highest on Record

Article excerpt

Jacksonville, Florida-based Black Knight Financial Services' (BKFS') Data and Analytics division released its August Mortgage Monitor Report on Oct. 6, and the findings show that the weighted average loan age has reached its highest point ever.

Kostya Gradushy, Black Knight's manager of Research and Analytics, commented in a release, "In terms of the entire active mortgage population, average loan age has been rising steadily for at least the last nine years."

Not surprisingly, the extremely high credit quality of more recent origination vintages is also showing up in the findings. Borrowers with very poor credit circumstances (and who are possibly underwater) are finding it hard to qualify for a refinance under current stringent underwriting terms, and thus their loan age is getting longer.

Furthermore, there is a desire by most borrowers to hang on to their historically low-rate mortgage.

Gradushy said, "The high volume of originations in 2013 resulted in a temporary slowdown [in the rise of the average loan age]. However, the average loan age since then has hit its highest level ever at 54 months. Reviewing the data at a more granular level, we see that the age of loans with credit scores of 750 and above has remained relatively constant for the last five years. …

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