Mortgage defaults

The housing finance industry supports a proposed rule revision that would exempt banks regulated by the Federal Deposit Insurance Corp. from an RMBS disclosure requirement.

While delinquent loans in commercial mortgage-backed securities continued trending downward overall, there was an uptick in the rate for more recent originations, a Standard & Poor's report noted.

Foreclosure activity fell 21% in July compared to a year ago and rose 6% from June after twelve consecutive months of declines, according to Attom Data Solutions.

The industry has long worried that the ability-to-repay rule gives borrowers an avenue to fight foreclosure, but one plaintiff’s experience may discourage others from trying.

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.

Mortgages using alternative documentation like bank statements for underwriting performed stronger than expected, but uncertainty remains about their default rates in stressed environments, Fitch Ratings said.

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.

Delinquencies associated with the government-sponsored enterprises high loan-to-value ratio programs that target low-to-moderate income homebuyers are slightly better than expected, at least early on, according to Fitch.

Commercial mortgages placed into special servicing grew last year, but default and foreclosure dollar volume fell as legacy loan resolutions outpaced newly distressed loans, according to Fitch Ratings.