Delinquencies

The withdrawal of pandemic housing relief and high home prices have heightened consumer strain, according to nonprofit Money Management International.

Over 111,000 distressed mortgage holders opted into a loan modification program during the COVID-19 pandemic by using a designated digital platform or app, according to Black Knight.

Current forbearance volumes have returned to pre-COVID levels among loans held at Fannie Mae and Freddie Mac, a Fed study found.

The 51 basis point increase was inevitable after the late payment rate reached a record low in the third quarter, the Mortgage Bankers Association said.

Foreclosure starts also increased by over 19% between October and November but remain below pre-pandemic levels.

But the likelihood of a recession and higher unemployment should drive the rate higher in the future, the Mortgage Bankers Association said.

Recent reports highlight the question of how much wage growth can do to sustain loan performance as pandemic relief gets rolled back, consumer costs rise and the housing market cools.

The rate at which borrowers went past due on their home loans showed near-term improvement in July, according to Black Knight, but servicers fear those who still have forborne payments won’t recover.

Forborne mortgages stemming from the coronavirus outbreak reached their lowest level since late March 2020, according to the Mortgage Bankers Association.

Late payments on office loans have trended upward recently, but longer lease periods may mitigate the potential for distress in that sector, the Mortgage Bankers Association said.