Distressed

Increased consumer debt and the threat of an economic downturn increase the default risk for government-sponsored enterprise mortgages during the first quarter, according to Milliman.

While seasonal factors were attributed to the monthly rise in mortgage delinquencies for June, the jump was still much higher than last year's fairly steady increase, according to Black Knight.

Life insurance companies increased their mortgage investments to levels higher than historical norms, creating more potential danger for their portfolios in the event of a real estate downturn, a Fitch Ratings report said.

Although the performance of the government-sponsored enterprises' single-family loans continues to improve, the deeply delinquent totals remain significant in states with court-processed foreclosures.

The large number of overleveraged commercial mortgage-backed securities loans coming due in 2019 is likely to cause the payoff rate to drop an additional 9 percentage points by December, a Morningstar report said.

Private-label mortgage securitizations with variable servicing fee arrangements could become more common going forward as issuers look to increase investor cash flow while reducing the loan servicer's economic exposure, Fitch said.

Freddie Mac's latest nonperforming mortgage auction will include one pool targeted to smaller investors like nonprofit organizations.

Caliber Home Loans settled a grievance with the Massachusetts attorney general over allegations of providing distressed borrowers with unaffordable loan modifications.

Controlling classes of investors in commercial mortgage-backed securitizations can replace a special servicer, but before they do, they should make sure the long and potentially expensive process is worth it.

Loans in commercial mortgage-backed securities originated after 2009 by nonbank lenders have a significantly higher default rate than those originated by banks, a Fitch Ratings report said.