Declining mortgage rates make the decision easy for homeowners thinking of mortgage refinancing. Despite an increase in refinances, servicers are having a difficult time recapturing borrowers, according to the latest Mortgage Monitor Report from Black Knight.
"A large driver has been a recent failure to retain 2018 vintage mortgages, which goes to show just how quickly lender/borrower relationships can evaporate without the right data and tools for servicers to early on identify clients in their portfolios with sufficient tappable equity, and act to retain them," said Black Knight Data & Analytics president Ben Graboske, according to a press release.
"Borrowers who left for 'greener pastures' received an average 0.08% lower interest rate than those who stayed, strengthening the need for tools to ensure rate pricing is competitive."
Cash-out refinances are the most prominent when it comes to losing borrowers. Though, Graboske cautions lenders and servicers to take note as "there are currently 44.7 million homeowners with equity available to tap via cash-out refinance or HELOC."
To learn more about servicer struggles to retain and recapture borrowers who are refinancing, click here.