Distressed

While the significant drop in suspended payments overall from the pandemic’s peak suggests many have recovered from related hardships, the uptick points to some new distress.

The number of loans with payments 90-plus days late but not in foreclosure has fallen below 1 million, but the total is still double pre-pandemic levels, according to Black Knight’s measure.

The residential market is generally healthy, but distress is growing in areas where foreclosures are more common, homes are less affordable, and more properties are underwater, Attom finds.

The remaining 705,000 borrowers with pandemic-related payment suspensions may have complex or recent hardships to sort out, but the majority who had plans have exited them.

The coming change will further test the effectiveness of Biden administration policies aimed at putting more affordable properties in the hands of consumers or charitable organizations.

COVID loan forbearance championed by progressives has created a new, permanent class of distressed borrower, Whalen writes.

But the number remaining was still more than twice as high as pre-pandemic, according to Black Knight.

Further declines occurred in November, albeit at a slower pace than in October, according to a new loan performance report from the Mortgage Bankers Association.

More than half of respondents to a recent Arizent survey think one-stop shops will be the biggest disruptor in the next three years, followed by all-cash purchase programs and iBuyers.

However, the seven institutions in the Office of the Comptroller of the Currency study service 13% fewer loans compared with the third quarter of last year.