Some 0.29% of mortgages were in forbearance as of the end of October.

The big concern: MSR packages could flood the market in the coming months as struggling lenders look for cash.

Lenders' slow moves on cutting staff as originations declined included a silver lining: improvements in customer service.

Securitization tied to financing acquisitions of MSRs dwindled in the past year, but banks are still providing financing to nonbank MSR buyers through loans.

The new issuance from Balbec Capital received a preliminary AAA rating with somewhat higher credit enhancement than a typical expanded-credit MBS. It’s the second scratch-and-dent MBS from Balbec this year.

With the supply of MSRs expected to grow, there are concerns that prices won’t hold up. Meanwhile, the CFPB is considering incentives for lenders to retain servicing.

Delinquencies in the 30-60-day bucket are increasing in line with trends in unemployment. Foreclosures remain limited though there are concerns about borrowers with low levels of built-up equity. (Includes data table.)

Mortgages originated through brokers accounted for nearly 20% of the bank's total originations in the first half of 2023.

A turnaround is unlikely until the second quarter of 2024, according to Marina Walsh, a vice president of industry analysis at the MBA.

Mortgage applications were up 2.8% on a weekly basis while interest rates stayed put.