Delinquencies

Refinance volume slipped following growth in mortgage rates, and loans refinanced through the Home Affordable Housing Program barely made a dent in overall volume, according to the Federal Housing Finance Agency.

Mortgage delinquencies in the fourth quarter were at their lowest level in nearly 19 years, helped by wage growth, low household debt and low unemployment, the Mortgage Bankers Association said.

The government-sponsored enterprises are going through a transition period. From proposals for rebuilding their capital cushions to tackling shortages in affordable housing, Fannie Mae and Freddie Mac face a number of key challenges with wide-ranging consequences this year.

Late payments on loans backing commercial mortgage bonds continued falling at the start of the year, due to strong new issuance volume and continued resolutions for precrisis loans by special servicers, according to Fitch Ratings.

Better credit quality and the influx of refinancing during the low interest rates of the last few years pushed mortgage performance to the highest levels since the turn of the century, according to Black Knight.

Risk aversion, economic momentum and the multidecade nadir of unemployment rates helped push delinquencies to the lowest year-end measure of the 21st century, according to Black Knight.

Continual declines in the refinance share of mortgage originations led to prepay rates dropping to their lowest levels since 2009, according to Black Knight.

More consumers fell behind on their loans in the third quarter of 2018, even as average wages rose and the unemployment rate fell to a 50-year low.

The strong economic headwinds from last fall facilitated a declining loan delinquency rate across the country, though areas hit by natural disasters had increased defaults, according to CoreLogic.

Fannie Mae's overall single-family serious delinquency rate dropped another notch in November, according to its most recent report, but the current government shutdown raises questions about whether that trend will continue.

Many servicers expect their Federal Housing Administration mortgage portfolios to grow in the next year or two, and that increase could coincide with an uptick in delinquencies, warns Altisource Portfolio Solutions.

Mortgage prepayment speeds fell to their lowest level in 10 years in November as rising interest rates took a toll on origination activity, according to Black Knight.

The performance of loans included in commercial mortgage-backed securities improved for the fifth consecutive quarter, with delinquencies down 179 basis points over the time frame, according to the Mortgage Bankers Association.

October's loan delinquencies, especially those in serious delinquency, got much healthier after improving from the fallout of the last two hurricane seasons, according to Black Knight.

Subprime originations are climbing in multiple consumer loan categories, including mortgages, but the increase is much smaller in the home loan sector than it is in other markets, according to TransUnion.

The mortgage delinquency rate dipped to a 12-year low, but overvalued housing markets and eventual reversal in the unemployment rate present risk for future delinquencies, according to CoreLogic.

Mortgage delinquencies inched up, in part from natural disasters hindering homeowner performance, but a stronger economy is still keeping defaults low, according to the Mortgage Bankers Association.

After a run-up in the latter half of last year, delinquencies on mortgages sold to Fannie Mae and Freddie Mac look fairly stable for the time being.

Commercial mortgage-backed securities delinquency rates are likely to continue to decrease for the rest of the year, as new issuances outpace maturing loans and precrisis loans continued to get resolved by special servicers, Fitch Ratings said.

The dollar volume of private-label residential mortgage-backed securities issuance this year is the highest it has been since the Great Recession, despite a decline in new originations.