MReport May 2022

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62 | M REPORT SECONDARY MARKET 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 RMBS Modifications and Repayments Increase Post-Forbearance As pandemic forbearance plans continue to expire, servicers are increasing staffing levels due to escalating post-forbearance activity. A s pandemic forbear- ance plans continue to expire, borrowers are continuing to choose loan modifications and other re- payment options going forward. According to Fitch Ratings' fourth-quarter 2021 Residential Mortgage-Backed Servicer Metric Report, servicers reported a decline in loan modifications from 40% during the third quarter of 2021 to 24% in the fourth quarter. Repayment options, including cures, increased however, from 11% in the third quarter to 26% in Q 4. Nonbank servicers reported loan modification volume increased slightly from 18% to 20% workout volume quarter over quarter while repayment options, including cures, rose only slightly to 7% from 6%. Fitch said this may indicate that nonbank borrowers may not opt for full reinstatement, preferring instead to apply for alternative loan workout options, if the bor- rower qualifies. "Concurrent with the increase in post-forbearance payment and loan workout activity, delinquency rates have seen a modest increase for nonbank servicers in the fourth quarter," the report said. "Nonbank servicers reported an increase in the 60+ day delin- quency category to 5% from 2% from the third quarter. Other delinquency metrics remained constant over the third and fourth quarters, with the exception of a decline in 90+ day past due ac- counts to 7% from 8% as reported by bank servicers." Servicers also reported that they have increased staffing levels due to escalating post-forbearance activity, and the use of tempo- rary and contract employees has declined by 20% year over year. While factors such as loan portfolio size, technology sophis- tication, and forecasting tools, among others, can influence these metrics, however, it is apparent that bank servicers have relied more heavily on temporary and contract employees and upstaffing to handle pandemic-related busi- ness volume. "Loan modifications and other repayment options saw a signifi- cant increase as borrowers exited forbearance plans in the fourth quarter," Director Richard Koch said. "Bank and nonbank servicers are showing that post-forbearance workout activity consists of loan modifications and repayment options, including cures, while delinquencies remain low." Ginnie Mae MBS Issuance Drops to $51.18B in March More than 189,000 homes and apartment units nationwide were financed by Ginnie Mae to close out Q1 of 2022. G innie Mae guaranteed mortgage-backed securi- ties (MBS) financed more than 189,000 homes, and apartment units in March 2022, as the month's issuance volume reached $51.18 billion—which in- cludes $48.71 billion of Ginnie Mae II MBS and $2.47 billion of Ginnie Mae I MBS (which includes ap- proximately $2.31 billion of loans for multifamily housing). In February, Ginnie Mae's MBS issuance volume stood at $53.01 bil- lion, as approximately 191,000 homes and apartment units were financed. "March's issuance volume shows that the Ginnie Mae MBS program continues to provide strong liquidity to meet the financing needs of homeown- ers and rental property owners," Ginnie Mae President Alanna McCargo said. "With rising inter- est rates, we expect volumes to decline as affordability is chal- lenged. In this current environ- ment, we are steadfast in our mission to remain a consistent source of finance for affordable housing and to find innovative ways to expand access to credit." As of March 31, Ginnie Mae's total outstanding principal balance was $2.186 trillion, up from $2.175 trillion in February 2022, and $2.095 trillion year over year in March 2021. Ginnie Mae was also recently honored as a recipient of the 2022 CIO 100 Award by Foundry's CIO, an award program that recognizes organizations around the world that exemplify the highest level of operational and strategic excellence in information technology (IT). "This is an important recogni- tion of the ambitious approach Ginnie Mae is taking to re- imagine and transform the way the agency manages our technol- ogy infrastructure," said Barbara Cooper-Jones, Ginnie Mae's SVP of the Office of Enterprise Data and Technology. "The mortgage finance industry is constantly innovating, and our technology transformation program consoli- dates our IT operations in a single and secure government cloud. Our cloud migration will increase agility, speed, and operational efficiency and enable digital trans- formation that meets the evolving needs of those who do business with Ginnie Mae. Our investment in cloud operations will help us sustain a strong government- financed housing market for mil- lions of families." Ginnie Mae will be recognized at the CIO 100 Symposium & Awards Ceremony, set for August 15-17 at the Terranea Resort in Rancho Palos Verdes, California. "Recognizing the finest work in IT, the CIO 100 Awards showcase the companies and executives leading the charge in innovation as the tech industry continues rapidly advancing," said Anne McCrory, Group VP, Customer Experience and Operations for IDG Events. "Across the board, this year's honorees are helping create a more advanced, inclusive environment for all tech profes- sionals."

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