Distressed

Payment suspensions will be utilized for other purposes but it remains to be seen whether its application in the pandemic will permanently broaden servicers' use of the strategy.

This represents a gradual rise in activity, not the tsunami that many feared would take place as COVID-era moratoriums wind down, Auction.com said.

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.

Despite slowing originations, the shift to a purchase-oriented market contributed to growth, while outstanding HELOC amounts also surged to its largest in over a decade, the Federal Reserve Bank of New York found.

New starts surged 75% compared to a year ago, but repossessions saw their first decline in one-and-a-half years, according to Attom.

More incentives are coming for servicers as a greater number of distressed borrowers get expanded access to more affordable, streamlined modifications.

Mortgage prepayment rates also fell to a new low for the third consecutive month in December, according to Black Knight.

Foreclosure prevention actions overall fell for the sixth time in seven months in October, according to the FHFA.

The share of loans with suspended payments remained steady as 2022 ended, but that could change this year if unemployment increases in line with forecasts, according to the Mortgage Bankers Association.

The measure enacted on Dec. 30, 2022 applies retroactively and could add servicing risks that lending divisions will likely consider in underwriting and pricing on new loans originated in the state.