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May 2023 » thefivestar.com 63 J O U R N A L May 2023 Of the cumulative forbearance exits for the period from June 1, 2020, through March 31, 2023, at the time of forbearance exit: » 29.6% resulted in a loan deferral/partial claim. » 18.0% represented borrowers who con- tinued to make their monthly payments during their forbearance period. » 17.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitiga- tion plan in place yet. » 16.1% resulted in a loan modification or trial loan modification. » 10.9% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance. » 6.5% resulted in loans paid off through either a refinance or by selling the home. » The remaining 1.2% resulted in repay- ment plans, short sales, deed-in-lieus, or other reasons. Total loans serviced that were current (not delinquent or in foreclosure) as a percentage of servicing portfolio volume (#) increased to 96.35% in March 2023 from 95.76% in February 2023 (on a nonseasonally adjusted basis). While total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/partial claims, loan modifications) that were current as a percent of total completed workouts increased to 76.70% in March, up from 76% reported the previous month. "MBA's forecast still calls for a recession in 2023, which may change the current performance levels, but credit quality is generally good and many borrowers facing financial hardship can now access enhanced loss mitigation options that resulted from successes of pandemic-related policies," Walsh added. According to the U.S. Bureau of La- bor Statistics (BLS), total nonfarm payroll employment rose by 236,000 in March, as employment continued to trend upward in leisure and hospitality, government, profes- sional and business services, and healthcare. Both the unemployment rate, at 3.5%, and the number of unemployed persons, at 5.8 million, changed little in March, measures that have shown little net movement since early 2022. SHARE OF DELINQUENT MORTGAGES DROPS C oreLogic has released its monthly Loan Performance Insights Report for January 2023, which found that 2.8% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 0.5 percentage point decrease compared with 3.3% in January 2022 and a 0.2 percentage point decrease compared with December 2022. "The share of home loans in delinquen- cy continues to decline, down from a high of 7.3% in the spring of 2020 and down by 0.5 percentage points from January 2022," said Molly Boesel, Principal Economist at CoreLogic. "The annual decrease in overall delinquencies was primarily driven by a large decline in the share of mortgages six months or more past due. Despite the drop in overall delinquencies, the foreclosure rate has slowly crept up. Although it remains near an all-time low, about 30,000 more U.S. home- owners are now involved in the foreclosure process." In January 2023, the U.S. delinquency and transition rates and their year-over-year changes, were reported by CoreLogic as follows: » Early-Stage Delinquencies (30 to 59 days past due): 3%, up from 1.2% in January 2022. » Adverse Delinquency (60 to 89 days past due): 4%, up from 0.3% in January 2022. » Serious Delinquency (90 days or more past due, including loans in foreclosure): 2%, down from 1.8% in January 2022 and a high of 4.3% in August 2020. » Foreclosure Inventory Rate (the share of mortgages in some stage of the fore- closure process): 3%, up from 0.2% in January 2022. » Transition Rate (the share of mortgages that transitioned from current to 30 days past due): 6%, down from 0.7% in January 2022. Data in CoreLogic's LPI report represents foreclosure and delinquency activity reported through January 2023. The data in this report accounts for only first liens against a property and does not include secondary liens. The delinquency, transition and foreclosure rates are measured only against homes that have an outstanding mortgage. Homes without mortgage liens are not subject to foreclo- sure and are, therefore, excluded from the analysis. CoreLogic has approximately 75% coverage of U.S. foreclosure data. U.S. mortgage performance barely moved in January, with overall delinquency and foreclosure numbers hovering near historic lows. Although annual home equity gains slowed significantly in the fourth quarter of 2022, the average borrower still has about $270,000 in equity, which can safeguard against foreclosure. Additionally, although layoffs at some-high profile technology companies have recently made headlines, the U.S. unemployment rate remained at less than 4% in the first two months of 2023. Across the nation, no state posted an annual increase in its overall delinquency rate in January. The states and districts with the largest declines were Alaska; New York; and Washington, D.C. (all down by just one percentage point). The other states' annual delinquency rates dropped between 0.9 and 0.1 percentage points. In January, 25 U.S. metro areas posted an increase in overall delinquency rates. The top three areas for mortgage delinquency gains year over year were found in Punta Gorda, Florida (up by 2.1 percentage points); Cape Coral-Fort Myers, Florida (up by two percent- age points); and Mansfield, Ohio (up by 0.5 percentage points). All but two U.S. metro areas posted a small annual decrease in serious delinquency rates (defined by CoreLogic as more than 90 days late on a mortgage payment), including Cape Coral-Fort Myers, Florida (up by 1.5 percentage point); and Punta Gorda, Florida (up by 1.4 percentage points).