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September 2023 » thefivestar.com 79 J O U R N A L September 2023 3,088 single- and multifamily residential prop- erties with a combined reconstruction value (RCV) of $1.3 billion were reported within three preliminary wildfire perimeters on Maui. By stage, 36.5% of total loans in forbearance were in the initial forbearance plan stage, while 53.3% were in forbearance extension. The remaining 10.3% were forbearance re-entries, including re-entries with extensions. Total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/ partial claims, loan modifications) that were current as a percent of total completed work- outs decreased to 73.73% in July from 74.70% the previous month. Of the cumulative forbearance exits for the period from July 1, 2020, through July 31, 2023, at the time of forbearance exit: » 29.5% resulted in a loan deferral/partial claim. » 17.8% represented borrowers who con- tinued to make their monthly payments during their forbearance period. » 18% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitiga- tion plan in place yet. » 16.1% resulted in a loan modification or trial loan modification. » 10.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance. » 6.5% resulted in loans paid off through either a refinance or by selling the home. » The remaining 1.2% resulted in repayment plans, short sales, deed-in-lieus or other reasons. The five states with the highest share of loans that were current as a percent of servic- ing portfolio included: » Washington » Colorado » Idaho » Oregon » California The five states with the lowest share of loans that were current as a percent of servic- ing portfolio included: » Louisiana » Mississippi » Indiana » New York » West Virginia FITCH SPOTLIGHTS RMBS DELINQUENCY TRENDS, BORROWER ASSISTANCE IMPACTS M ortgage servicers nationwide continue to work with struggling homeowners to avoid loan default, as early delinquencies remain flat and late- stage delinquencies show positive movement, according to Fitch Ratings' 1Q23 U.S. RMBS Servicer Metric Report. "While loan portfolio delinquencies for Fitch-rated bank and nonbank servicers were flat or modestly improved for the fifth consecutive quarter, the impact of borrower assistance programs and successful workout strategies is holding new foreclosure filings to a minimum," Fitch Ratings Director Richard Koch said. Fitch's U.S. RMBS Servicer Metric Report is published quarterly with the most recent four quarters of servicer performance data included, providing transparency into servic- ing industry trends in the bank and nonbank sectors. Bank servicers reported an increase in loan modification requests as a percentage of all loss mitigation volume, quarter over quarter to 31% from 25%, while that volume was down to 13% from 17% for nonbank servicers. Active forbearance plans for bank servicers increased quarter over quarter to 36% from 11.5% as a percentage of loss mitiga- tion volume, indicating an influx of applica- tions from borrowers that had not previously exhausted forbearance. Nonbank servicers reported a decrease in forbearance plans to 35% from 47%, quarter over quarter. The Mortgage Bankers Association's (MBA) monthly Loan Monitoring Survey for July 2023 revealed that the total number of loans now in forbearance dropped by five basis points from 0.44% of servicers' portfolio volume in the pri- or month to 0.39% as of July 31, 2023. According to MBA's estimate, 195,000 U.S. homeowners are currently in forbearance plans, and since March 2020, mortgage servicers have provided forbearance to approximately 7.9 million bor- rowers nationwide. "The prevalence of forbearance plans has dramatically dropped since 2020, and the reasons that borrowers are in forbearance are changing," said Marina Walsh, CMB, MBA's VP of Industry Analysis. "About two-thirds of borrowers are still in forbearance because of the effects of COVID-19, but a growing share of borrowers are in forbearance for other reasons that cause temporary hardship such as financial distress or natural disasters. With the COVID-19 national emergency lifted, Fannie Mae and Freddie Mac recently announced the retirement of certain COVID-19 flexibilities relating to forbearance plans and workouts." Fitch reported that bankruptcy caseloads showed no significant change quarter over quarter for bank and nonbank servicers, while foreclosure volume increased by 1% for bank servicers, and decreased 1% for nonbank servicers. Bank and nonbank ser- vicers both showed a decrease of 1% in their reported 90-plus day delinquencies. Real estate-owned (REO) inventory trends during the last five quarters reflected a continuing decrease in highly aged inventory (greater than 360 days), as mortgage servicers continue to work through their post-pan- demic REO inventory. However, servicers reported a steady increase in new REO properties in all buckets prior to the 360-plus day category, reflecting a steady resumption of active foreclosure filings that commenced in the fourth quarter of 2022. Additional findings in the Q1 2023 U.S. RMBS Servicer Metric Report include: » Bank servicers reported a substantial decrease in full-time employees from the previous quarter of 17%. » Nonbank servicers downsized again by about 6% on average from the previous quarter. In early August, Fitch Ratings downgraded Fannie Mae's and Freddie Mac's Long-Term Issuer Default Ratings (IDR) and senior unsecured debt ratings to 'AA+' from 'AAA' and downgraded their respective Government Support Ratings (GSR) to 'aa+' from 'aaa'. The downgrade by Fitch Ratings was precipitated because the ratings for the GSEs are linked to the sovereign rating of the United States, which the firm downgraded as well. Fitch Ratings said that both Fannie Mae and Freddie Mac as GSEs benefit from implicit government sup- port, thereby warranting the downgrade. "The downgrade of Fannie Mae's and Freddie Mac's Long-Term IDRs and GSRs is consistent with the recent action taken on the United States and is not being driven by