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MortgagePoint April 2024

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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 64 April 2024 J O U R N A L employment rose by 275,000 in February, and the unemployment rate increased to 3.9%. Job gains occurred in healthcare, government, food services and drinking establishments, social assistance, and transportation and warehousing. The BLS also reported that the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4% in February on a seasonally adjusted basis, after rising 0.3% in January. Over the last 12 months, the all-items index increased 3.2% before seasonal adjustment. "The Consumer Price Index in February increased 0.4% month over month and 3.2% year over year, higher than expected," First American Econo- mist Ksenia Potapov noted. "Core CPI, all items less food and energy, rose 0.4% month over month and 3.8% year over year." The CPI for shelter rose in February, as did the Index for gasoline. Combined, these two indexes contributed more than 60% of the monthly increase in the index for all items. The energy index rose 2.3% over the month, as all of its component indexes increased. The food index was unchanged in February, as was the food- at-home index. The food-away-from- home index rose 0.1% over the month. "Shelter and service inflation are slowly decelerating. Goods deflation, common throughout the past two decades, is helping push CPI down," Potapov added. "Zoomed out, this CPI report suggests that inflation is cooling overall, but doing so slowly." With the overall cost of living on the rise, were homeowners in decent shape in paying their mortgage? The MBA reported that by reason, 71.9% of borrowers were in forbearance plans for reasons such as a temporary hardship caused by job loss, death, divorce, or disability; while 16.1% of borrowers are in forbearance because of COVID-19. Another 12% are in forbearance due to natural disasters. "The performance of servicing port- folios and loan workouts improved in February, as borrowers benefitted from tax refunds, the extra day in the month to submit their payments, and continued resilience in the job market," said Marina B. Walsh, CMB, MBA's VP of Industry Analysis. "Only around 110,000 loans nationwide remain in a forbearance plan, with little movement this month. The pandemic's impact has waned, with only 16% of borrowers in forbearance because of COVID-19, compared to 72% for tem- porary personal hardships, and 12% for natural disasters." Measuring Forbearance Share Loans in forbearance as a share of servicing portfolio volume (#) as of Feb- ruary 29, 2024: Total: » 0.22% (previous month: 0.22%) » Independent Mortgage Banks (IMBs): 0.25% (previous month: 0.26%) » Depositories: 0.23% (previous month: 0.22%) Gauging Forbearance Stages By stage of forbearance, 56.2% of total loans in forbearance were in the initial forbearance plan stage, while 25.2% were in a forbearance extension. The remain- ing 18.6% were forbearance reentries, including reentries with extensions. Of the cumulative forbearance exits for the period from July 1, 2020, through Febru- ary 29, 2024, at the time of forbearance exit: 29.3% resulted in a loan deferral/ partial claim. » 17.6% represented borrowers who con- tinued to make their monthly payments during their forbearance period. » 18.7% represented borrowers who did not make all 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. » 10.7% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance. » 6.4% resulted in loans paid off through either a refinance or by selling the home. The remaining 1.2% resulted in re- payment plans, short sales, deeds-in-lieu, or other reasons. Forbearance by Region The five states reporting the highest share of loans that were current as a per- cent of servicing portfolio included: » Idaho » Colorado » Washington » California » Montana The five states reporting the lowest share of loans that were current as a per- cent of servicing portfolio were found in: » Louisiana » Mississippi » Indiana » New York » Illinois "Shelter and service inflation are slowly decelerating. Goods deflation, common throughout the past two decades, is helping push CPI down." —Ksenia Potapov, Economist, First American

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