As the economy and real estate market slowly improve, more mortgage holders are making on-time payments, according to Lender Processing Services.
LPS' August Mortgage Monitor report showed loan repayment activity hit its highest level since 2005, as the inventory of loan 90 or more days delinquent is nearly 50 percent below its January 2010 peak. The total U.S. loan delinquency rate in August dropped 2.3 percent, to 6.87 percent.
"Our analysis showed an increase in prepayment activity across the entire combined loan-to-value (CLTV) continuum," said LPS president Herb Blecher. "While those loans with equity, particularly 80 percent CLTV and below, have much higher prepayment speeds, the impact of the Home Affordable Refinance Program was also clear."
Blecher told Bloomberg the current interest rate environment should present a lot of opportunities for borrowers to refinance.
Mortgage refinances have helped many Americans pay their loans on time, as all-time low rates have allowed them to lower their monthly payments.