A new Trepp report showed that while the percentage of loans that paid off on their balloon date rose seven basis points to 42.2% in June, the rate is still struggling to recover after two consecutive months of decline.
The June figure was also above the 12-month rolling average of 39.6%. Trepp also reported that in terms of loan count, rather than balance, 56.1% of the loans paid off, up from 48.1% recorded in May.
While this shows some improvement, payoff percentages are still significantly below the 84.9% experienced in December 2008, which was in line with the pre-crisis trend for pay offs to stay well above 70%.
However, Trepp noted that since the beginning of 2009, there have only been two months in which the percentage rose above 50%.
The pay off statistic was created by Trepp to hone in on extension scenario assumptions and highlight what percentage of loans failed to pay off. The data included in the analysis only includes loans that survive up to their balloon date.