DS News

DS News December 2022

DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.

Issue link: http://digital.dsnews.com/i/1488299

Contents of this Issue


Page 23 of 99

22 FORBEARANCE VOLUME RISES FOR FIRST TIME IN 29 MONTHS e Mortgage Bankers Association (MBA) reports that the total number of loans nationwide now in forbearance increased by just one basis point from 0.69% of mortgage servicers' portfolio volume in the prior month to 0.70% as of October 31, 2022. According to MBA's latest estimate, there are approx- imately 350,000 U.S. homeowners now in forbearance plans. By investor type, the share of Fannie Mae and Freddie Mac (GSE) loans in forbearance increased just one basis point from 0.30% to 0.31%, while Ginnie Mae loans in forbearance increased eight basis points from 1.33% to 1.41%, and the forbearance share for portfolio loans and private-label securities (PLS) de- clined 11 basis points, from 1.14% to 1.03%. "e overall share of loans in forbearance increased slightly in October, but it was a mixed bag by investor type. e forbear- ance rate for Ginnie Mae, Fannie Mae, and Freddie Mac loans increased, and there was a decline in portfolio and PLS loans in forbearance," said Marina Walsh, CMB, MBA's VP of Industry Analysis. "Several factors were behind the first monthly increase in forbearances in 29 months, including the effects of Hurricane Ian in the Southeast, the diminishing number of loans bought out of Ginnie Mae pools and placed in portfolio, and the fact that new forbearance requests have closely matched forbearance exits for the past three months." According to CoreLogic, estimates of the damage and loss totals from Hurricane Ian found total flood and wind losses came in at between $41 billion and $70 billion. is estimate includes wind loss, reevaluated insured and uninsured storm surge loss, and newly calculated inland flood loss for residen- tial and commercial properties. Hurricane Ian is the costliest Florida storm since Hurricane Andrew made landfall in 1992. MBA's Loan Monitoring Survey requests that servicers report all loans in forbearance regardless of the borrower's stated reason— whether pandemic-related, due to a natural disaster, or another cause. "e overall share of loans that were current last month decreased 15 basis points to 95.70%, with 44 states reporting declines (not delinquent or in foreclosure)," Walsh added. "Florida, which was hit the hardest by Hurricane Ian, experienced a 49-basis-point drop in the share of loans that were current— the biggest decline of all states." e share of current loans declined in 44 states compared to the previous month. Of these states, Florida posted the largest monthly decline, dropping 49 basis points to 95.35% in October from 95.84% the previous month. By stage, 36.7% of total loans in for- bearance were in the initial forbearance plan stage, while 50.9% were in a forbearance extension. e remaining 12.4% were for- bearance re-entries, including re-entries with extensions. Of the cumulative forbearance exits for the period from June 1, 2020, through Octo- ber 31, 2022, at the time of forbearance exit: » 29.6% resulted in a loan deferral/partial claim. » 18.3% represented borrowers who continued to make their monthly payments during their forbearance period. » 17.3% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet. » 16.0% resulted in a loan modification or trial loan modification. » 11.0% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance. » 6.6% resulted in loans paid off through either a refinance or by selling the home. » e remaining 1.2% resulted in repayment plans, short sales, deeds-in-lieu, or other reasons. Regionally, the five states with the highest share of loans current as a percent of servic- ing portfolio included: » Washington » Idaho » Colorado » Utah » Oregon e five states reporting the lowest share of loans that were current as a percent of servicing portfolio included: » Mississippi » Louisiana » New York » West Virginia » Indiana Journal "Florida, which was hit the hardest by Hurricane Ian, experienced a 49-basis- point drop in the share of loans that were current—the biggest decline of all states." —Marina Walsh, CMB, MBA's VP of Industry Analysis

Articles in this issue

Archives of this issue

view archives of DS News - DS News December 2022