Distressed

And the rate of distress in second-lien home loans ticked up from the previous month, according to Standard & Poor's Dow Jones and Experian.

Payment suspensions on loans securitized through the government-backed market stopped falling in May, plateaued over the summer, and reversed course last month, according to an industry trade association.

Roughly 16% of home loan borrowers likely have education debt, less than one-third of those may be distressed, Mr. Cooper executives told investors at a conference this week.

Still near historic low levels, the share of borrowers entering the early stages of delinquency in June increased 0.1 percentage point.

Completions in August remained far lower than before COVID-19 arrived in the United States but initial actions rose fast enough to potentially meet expectations that they'll normalize in 2023.

A mix of new distress and declining cures drove the uptick, according to dv01.

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.

Foreclosure starts also fell, coming in below pre-pandemic pace, according to Black Knight.

Rising interest rates and emergence from pandemic contingencies could put increased strain on the ability to repay, but signs of near-term loan performance stress have been limited.

But a slower-than-anticipated rate of repossessions suggest distressed homeowners are finding solutions.

The opinion heightens the need for servicers to be careful about billing communications, particularly when a distressed loan or foreclosure is involved.