The percentage of loans paying off on their balloon date rebounded sharply from July's dismal reading, according to the Trepp August 2012 Payoff Report.

Last month, the reading hit a 12-month low of 26 percent.

In August, 49.6% of loans reaching their balloon date paid off, nearly double the July level. This month's reading was the second highest in 2012, surpassed only by the 61.6% posted in February.

"In many ways, the improving payoff rate was to be expected," writes Trepp. "For the first half of the year, a lot of the five-year loans originated in 2007 reached their balloon date, as the vast majority of these loans were made in the first six months of 2007. Most of these loans have had difficulty refinancing, which led to a huge dip in the percentage of loans paying off over the last few months."

For the remainder of the year, the loans reaching their maturity date should be more heavily skewed to earlier vintages, Trepp says. Loans from those periods were made with lower leverage and more reasonable valuations. The result should be better payoff numbers - much like August's - in the coming months.

Prior to 2008, the monthly payoff percentages were typically well north of 70%. Since the beginning of 2009, however, there have only been four months in which more than half of the balance of loans reaching their balloon date actually paid off.