Distressed

The number of these mortgage borrowers getting back on track with payments has been roughly halved since March, according to Black Knight's initial take on July numbers.

The latest increase suggests the housing finance industry is half done with its transition from extraordinary pandemic relief back to more normal loan performance.

Pandemic-related payment suspensions dropped notably for loans held in bank portfolios and private-label securities, but numbers for large government-related markets leveled off, according to the Mortgage Bankers Association.

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.

A few studies released Tuesday add to expectations that the small number of mortgages remaining in forbearance will contribute to a higher foreclosure rate in the future.

But many expect only a slight increase in completions, with the rate at which delinquent mortgages cure outperforming the historic average, according to Auction.com.

The increase in late payments ends three consecutive months of declines to record lows, but the uptick could be an aberration.

The jump for second mortgages and bank cards was even more pronounced, according to indices published by Standard & Poor’s and Experian.

A Federal Reserve Bank of Philadelphia research group called the early indication of outcomes “concerning given overall strong market conditions.”

Most distressed borrowers who obtained adjustments to their payment amounts saved more than 20% in the first quarter, according to the Federal Housing Finance Agency.