MReport February 2019

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TH E M R EP O RT | 51 SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T Carson on the Future of Housing HUD Secretary Dr. Benjamin Carson will share his vision for the agency at the 2019 Five Star Government Forum. D r. Benjamin Carson, United States Secretary of Housing and Urban Development will address industry leaders during a keynote at the 2019 Five Star Government Forum in Washing- ton, D.C., on April 23, 2019. A day-long gathering that brings together representatives from federal agencies and leaders from mortgage servicing and the govern- ment for an open dialogue on the policies that govern the mortgage and housing industries, the Five Star Government Forum is in its tenth year now. "We are honored to host Secretary Carson at the 2019 Government Forum," said Ed Delgado, President and CEO of the Five Star Institute. "HUD's leadership is essential to ensuring that homeownership is responsibly preserved, protected, and pro- moted through the promulgation of common-sense regulatory guidance. I look forward to hearing Secretary Carson discuss his vision for HUD and furthering the well-being of the United States housing market." In a discussion with Delgado during the forum in April 2018, Carson had answered questions on the future of HUD, housing affordability, and working with the mortgage industry for the greater benefit of homeowners. During the conversation, Carson told the as- sembled guests that he was proud of HUD's work to "empower oth- ers and move them up the ladder." Measuring Mortgage Modifications What does mortgage performance data reveal about the state of loans in the U.S.? S ome of the biggest banks in the U.S. re- ported an improvement in the overall mortgage performance in Q 3 according to the Office of the Comptroller of Currency's (OCC's) Mortgage Metrics report. The report revealed that as of September 30, 2018, the reporting banks had serviced 17.2 million first-lien mortgage loans with $3.26 trillion in unpaid principal balances indicating 32 percent of all residential mortgage debt outstanding in the U.S. This indicated that 95.4 percent mortgages were current and performing com- pared with 94.8 percent a year ago. Looking at loan modifications in Q 3, the report indicated that servicers completed 25,701 modifications, a decrease of 21.3 percent over the last quarter. Of these, 21,766 were combination modifications that included "mul- tiple actions affecting affordability and sustainability of the loan, such as an interest rate reduction and a term extension." Among the 21,766 completed combination modifications, the report said, 96.6 percent included capitalization of delinquent inter- est and fees, 43.4 percent included an interest rate reduction or freeze, 96 percent included a term extension, 1.2 percent a princi- pal reduction, and 13.5 percent included principal deferral. The report also said that of the 23,427 modifications that were completed during the first quarter of 2018, "servicers reported 3,580, or 15.3 percent, were 60 or more days past due or in the process of fore- closure at the end of the month that they became six months old." Servicers also initiated 28,508 new foreclosures during the third quarter of 2018, according to This marked a 3.7 percent quarter-over- quarter decrease and a 16.8 percent decline from a year ago. Home forfeiture actions during the quarter that included com- pleted foreclosure sales, short sales, and deed-in-lieu-of-foreclosure action, decreased 30.4 percent from year-over-year to 15,506. The report is based on data collected on first-lien residen- tial mortgage loans serviced by seven national banks with large mortgage servicing portfolios. They include Bank of America, Citibank, HSBC, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo. The report excludes mort- gage loans like junior liens, home equity lines of credit (HELOC), and reverse mortgages. ∆21.3% Percent of loan modifications decrease in Q3 over the previous quarter.

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