‘Serial Refinancers’ Helped Boost Mortgage Origination Volume In 2015

How much of a role did the so-called “serial refinancers” – the borrowers who refinance their mortgages multiple times, typically each time interest rates decline – play in the rise and fall of refinance volumes throughout 2015?

According to the most recent Mortgage Monitor report from Black Knight Financial Services, rate/term refinances from borrowers who had held their prior mortgages for less than two years jumped by 800% from the first quarter of 2014 to the first quarter of 2015.

When rates rose toward the end of 2015, this population dropped by nearly 65%, the firm’s data shows. This resulted in two-thirds of rate/term refinances in the fourth quarter stemming from borrowers who held their prior mortgages for more than four years.

In addition, Black Knight found that term reductions have become an increasingly popular part of refinance transactions. In the fourth quarter, about 37% of rate/term refinances included a term reduction.

Black Knight’s data also shows that $68 billion in equity was extracted via cash-out refinance transactions in 2015 – the most since 2009 and a 53% increase over 2014.

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