Delinquencies

The relatively low share of borrowers who were distressed in June adds to signs that the offramp from government relief measures may not lead to an overwhelming wave of foreclosures.

Consumers are booking rooms at levels not seen since early 2020 and loan delinquencies have fallen sharply as a result. Still, business travel remains sluggish and new COVID variants are spreading, threatening the hotel industry’s recovery.

Identifying where payment stress is concentrated could help mortgage servicers and federal policymakers prepare for the broader range of loan workouts that will resume this summer.

It will be several years before business and group travel return to normal levels, according to an estimate from the American Hotel & Lodging Association.

Rebounding employment brought total forborne mortgages under 2 million, according to the Mortgage Bankers Association.

Private mortgage insurers can continue to hold less capital for forborne delinquent loans, which helps them potentially upstream payments to parent companies in the third and fourth quarters.

The numbers, which include payments suspended for pandemic-related hardships, could be a consideration in the possible further extension of moratoria federal regulators are close to making a call on.

The strength of the housing market helped to increase forbearance exits while minimizing new requests, according to the Mortgage Bankers Association.

About 20% of the pandemic-related delinquent borrowers are up for review by the end of June, which could lead to vast improvement or deeper financial strife, according to Black Knight.

Meanwhile, National MI has been increasing its new insurance written by slightly widening its credit standards.