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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 26 July 2023 F E A T U R E KEEPING AFLOAT MortgagePoint speaks with mortgage servicing execs from BOK Financial, Carrington, the NMSA, PHH Mortgage Corporation, and Servbank about the unusual times and unusual opportunities the industry faces midway through 2023. B y E R I C C . P E C K W hen assessing the state of the mortgage servicing space mid- way through 2023, several fac- tors come into play. Forces are pushing and pulling at the housing industry from multiple angles as buyers struggle with affordability issues amid ongoing fears of an economic recession. The Mortgage Bankers Association's (MBA) latest Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by two basis points from 0.51% of servicers' portfolio volume in April 2023 to 0.49% as of May 31, 2023. According to the MBA, an estimated 245,000 U.S. homeowners remain in forbearance plans. And since March 2020, mortgage ser- vicers have provided forbearance opportuni- ties to approximately 7.9 million borrowers. Collaboration between the servicing industry and government agencies proved to be successful for many Americans in provid- ing home retention solutions during the time of the pandemic. A recent white paper from Legal League 100's Special Initiatives Work- ing Group (SIWG), entitled The Homeowner Assistance Fund: The Current Status of the HAF Program in Select Jurisdictions, examined how the Homeowner Assistance Fund (HAF) provided relief for homeowners in U.S. states, U.S. territories, and Tribal governments dur- ing the time of the pandemic. On March 11, 2021, President Joe Biden signed The American Rescue Plan Act of 2021 into law, which established the HAF, which was to provide up to $9.961 billion in financial relief for struggling homeowners nationwide. HAF's purpose was to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services, and dis- placement of homeowners experiencing fi- nancial hardship after January 21, 2020. It has been found that HAF assistance extended to a broader range of economically vulnerable and traditionally underserved homeowners than prior federal mortgage assistance and foreclosure prevention programs. Fitch Ratings recently reported that from Q3 2022 to Q4 2022, bank and nonbank servicers reported a continuing decrease in loan modifications quarter over quarter, reaching 25% from 31%, and 16.5% from 17%, respectively. Borrower assistance programs accounted for 44% of monthly loss mitiga- tion workout volume for bank servicers in Q4 2022, an increase from 2.39% over Q3 2022, while nonbank servicers reported a 9% decline from the previous quarter to 20.55% in Q4 2022. In mid-June, the Federal Reserve paused its series of aggressive rate hikes in its goal to ease inflation. However, as First American Deputy Chief Economist Odeta Kushi noted that the Fed's actions may not be achieving their intended goals: "Inflation and the labor market are not responding as the Fed expected, according to the FOMC's latest Summary of Economic Projections," Kushi noted. "The unemploy- ment rate ticked up to 3.7% in May, while the March FOMC projections expected the un- employment rate to reach 4.5% by the fourth quarter of 2023. The Fed also expected core PCE (Personal Consumption Expenditures) to decline to 3.6% year over year by the fourth quarter, yet it remained at 4.7% as of April. In both cases, nearly an entire percentage point for each indicator is a wide gulf to cross in the next six months and unlikely to hap- E R I C C . P E C K has 20-plus years' experience covering the mortgage industry, and he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in communication arts/media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for entrepreneur.com.