The second quarter of 2020 generated the strongest profits from mortgage banking that the banking industry has seen in years. MSR accounting issues were a drag, but production volume and margins soared. (Includes data chart.)
Given the widespread shuttering of consumer-focused businesses due to the coronavirus, it’s no surprise that securitization of loans on retail properties plummeted 90.1% to just $275.0 million.
After taking big hits in credit expenses and hedging losses in early 2020, Fannie and Freddie reported more normal net income in the second quarter. (Includes data chart.)
Not surprisingly, mortgages on retail and lodging properties were hit the hardest in the economic fallout of the coronavirus. Agency multifamily MBS issuance rose significantly in the second quarter. (Includes data chart.)
Delinquency rates generally went higher in the second quarter, and forbearance counts continued to climb. With MSR sales down, larger servicers generally ceded ground to smaller firms. (Includes three data charts.)
At the end of June, a whopping 14.07% of FHA loans in Ginnie pools were delinquent, up from 7.57% in March, according to anInside FHA/VA Lending analysis of MBS disclosures.
There was a huge spike in early-payment delinquencies in April that migrated to more serious categories of default in May and June. Last month saw a huge increase in servicer buyout of delinquent loans. (Includes four data charts.)
The vehicle-finance sector hit a pothole as new issuance skidded 26.0% from the first quarter to $21.61 billion. But that represented 62.9% of new ABS production for the second quarter.
Although ABS issuance backed by auto finance fell 26% from the first to the second quarter, the sector still accounted for nearly 57% of non-mortgage securitization in the first half of 2020. (Includes two data charts.)