Servicing of jumbo mortgages increased at most of the 30 top firms in the sector during the third quarter. However, top-ranked Wells Fargo bucked the trend. (Includes data chart.)
Early-stage delinquencies jumped in the third quarter, prompting a quarterly increase in the total past-due rate. Many borrowers that have been in forbearance for 18 months are also reaching the end of their payment holidays. (Includes data chart.)
Mortgage-related gripes to the CFPB declined by 14% in the third quarter. Loan mods showed the weakest improvement, with complaints down 5%. (Includes two data charts.)
Shellpoint was named as servicer on $7.31 billion of non-agency MBS issued during the third quarter. Cenlar, a major subservicer in the sector, is under a consent order with the OCC. (Includes data chart.)
If capital and liquidity requirements for nonbank servicers are too stringent, firms could leave the business and borrowers’ costs for mortgages could increase.
Given the home price spike seen in the past 18 months, many distressed borrowers have enough equity to sell their homes rather than face foreclosure. Still, previous practices suggest that a notable share of borrowers with strong equity positions will go through foreclosure.
The share of securitized non-QMs that are delinquent or modified increased in August for the first time since February. Still, industry analysts are comfortable with the long-term outlook for performance.
The federal regulator will continue to take a close look at mortgage servicers’ actions as a wave of distressed borrowers nears the end of their pandemic-related forbearance programs.
Many of the borrowers facing the end of their forbearance plans are struggling financially. Servicers say they’re ready to help, and for those who can’t resume payments there’s home price appreciation to bank on.
Among a group of 15 servicers tracked by this publication, nonprime servicing balances were essentially unchanged between March and June. At the servicer level, there were some fluctuations. (Includes data chart.)