Delinquencies

The overall mortgage delinquency rate improved in the third quarter as the economy got healthier while late-stage delinquencies hit a decade high, according to the Mortgage Bankers Association.

While the overall rate fell in October, S&P noted a sharp rise in the proportion of loans overdue 60 days as many roll out of COVID-19 forbearance.

Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.

While overall mortgage delinquency rates slowly descend, serious delinquencies — especially loans past 120 days due — jumped in July, according to CoreLogic.

The Consumer Financial Protection Bureau's overhaul of its Qualified Mortgage standard is alarming free-market advocates who say it will precipitate a return to easy credit and higher defaults and could disproportionately harm minorities.

Over 3.6 million borrowers sit in coronavirus-related forbearance with portfolio and private-label securitized loans driving the week's increase, according to Black Knight.

Deals, trends and research in structured finance and asset-backed securities for the week of Sept. 25-Oct. 1

Deals, trends and research in structured finance and asset-backed securities for the week of Sept. 18-24

“The Fed has made it clear that they don’t want a liquidity problem in the Treasury market or the higher-grade corporate market,” Fuss said. “They cannot, unfortunately, underwrite lending in the private markets.”

A new report on bank-held commercial real estate and C&I loans indicates troubled borrowers may be skipping payments on loans they won't be able to refinance or extend over the next year, leading to a potential wave of defaults over the next four to six quarters.