Distressed

The withdrawal of pandemic housing relief and high home prices have heightened consumer strain, according to nonprofit Money Management International.

In July, month-to-month missed payments increased but improved on an annual basis because a lower share of borrowers were 90 days or more late.

Since 2019, distressed loans have increased 77%, but it is just a small portion of the $691 billion currently outstanding.

The mortgages are part of a program that received congressional scrutiny earlier this year.

The government-sponsored enterprises have consistently earmarked some distressed loans for community, nonprofit and minority investors. Certain Democrats want more.

While a majority of current forborne borrowers sought relief for reasons related to COVID-19, servicers are seeing a growing share of cases involving natural disasters or personal financial issues, the Mortgage Bankers Association said.

But mortgage numbers remain historically very low and fall short of pre-pandemic levels, according to VantageScore's latest monthly report.

But the volume of activity for distressed properties is still lower than the historic norms, Attom Data Solutions said.

The payment supplement partial claim the Federal Housing Administration proposed could be effective but not as is, according to the Mortgage Bankers Association and two other groups.

The amount of distressed assets rose 10% in the first three months of the year, according to a new report from MSCI Real Assets.

But when compared past periods of upheaval, those rates remain relatively low, the Mortgage Bankers Association report showed.

Now that the national emergency is over some — but not all — government-related entities have set what may be final deadlines for this form of pandemic relief.

But the percentage of loans in workout no longer current increased in April, the Mortgage Bankers Association found.

Consumers are receiving demand letters on loans they have not had any communication about in at least 10 years, the regulator said.

Economic turbulence affected borrowers during the quarter and will likely impact their ability to refinance maturing loans, the Mortgage Bankers Association said.

The 51 basis point increase was inevitable after the late payment rate reached a record low in the third quarter, the Mortgage Bankers Association said.

New starts surged 75% compared to a year ago, but repossessions saw their first decline in one-and-a-half years, according to Attom.

Mortgage prepayment rates also fell to a new low for the third consecutive month in December, according to Black Knight.

Foreclosure prevention actions overall fell for the sixth time in seven months in October, according to the FHFA.

The share of loans with suspended payments remained steady as 2022 ended, but that could change this year if unemployment increases in line with forecasts, according to the Mortgage Bankers Association.