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MortgagePoint July 2023

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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 58 J O U R N A L July 2023 Default Servicing SERIOUS DELINQUENCIES CONTINUED TO IMPROVE IN MAY A ccording to Black Knight, reversing much of April's calendar-driven spike, the national delinquency rate fell 11 basis points in May 2023 to 3.10%—the lowest reported total rate since March 2023's record low of 2.92% The number of bor- rowers who were a single payment past due improved by 94,000 (-9.5%), erasing nearly half of the prior month's increase. Serious delinquencies (loans 90 or more days past due) continued to improve nation- ally, sliding by 18,000 (-3.7%) from April 2023's reported total, putting the population of such loans down more than 200,000 (nearly 30%) since May of 2022. In terms of foreclosures, Black Knight reported that foreclosure starts increased to 25,400 for the month (+2.2%), remaining near April's six-month low, and 41% below the same period reported in 2019, the last comparable May before the pandemic. Foreclosure actions were started on 5.1% of serious delinquencies in May 2023, up only marginally from April, and still more than a full percentage point below the March 2020 recorded rate at the outset of the pandemic. The number of loans in active foreclosure improved by 4,000 in May and is now down 41,000 (-15%) from March 2020's reported total, with foreclosure sales (completions) rising 5.5% from April 2023 to 6,800. The top five states reporting the highest noncurrent percentage (a combination of foreclosures and delinquencies as a percent- age of active loans in that state) include: » Mississippi: 7.34% » Louisiana: 6.78% » Alabama: 5.33% » West Virginia: 4.87% » Pennsylvania: 4.84% The five states reporting the lowest noncurrent percentage (a combination of foreclosures and delinquencies as a percent- age of active loans in that state) include: » Oregon: 2.09% » Montana: 2.02% » Idaho: 2.01% » Colorado: 1.96% » Washington: 1.92% The top five states ranked by 90-plus days delinquent include: » Mississippi: 2.21% » Louisiana: 1.81% » Alabama: 1.55% » Arkansas: 1.34% » Georgia: 1.23% The top five states by 12-month change in noncurrent percentage (a combination of foreclosures and delinquencies as a percent of active loans in that state) include: » Alaska: -24.21% » Connecticut: -15.19% » Vermont: -12.33% » New York: -11.87% » North Dakota: -10.76% The bottom five states by 12-month change in noncurrent percentage current (a combination of foreclosures and delinquen- cies as a percent of active loans in that state) include: » Idaho: 14.44% » Utah: 6.09% » Arizona: 5.84% » Michigan: 5.62% » Georgia: 3.35% SERVICERS' FORBEARANCE VOLUME DIPS TO THREE-YEAR-LOW T he Mortgage Bankers Association (MBA) latest Loan Monitoring Survey for May 2023 revealed that the total number of loans now in forbearance decreased by two basis points from 0.51% of servicers' portfolio volume in the prior month to 0.49% as of May 31, 2023. The MBA estimates that 245,000 home- owners are in forbearance plans and that servicers have provided forbearance opportu- nities to approximately 7.9 million borrowers since March 2020. By loan type, the share of Fannie Mae and Freddie Mac (GSE) loans in forbearance decreased one basis point from 0.24% to 0.23%, while Ginnie Mae loans in forbear- ance decreased five basis points from 1.11% to 1.06%. The forbearance shares for portfolio loans and private-label securities (PLS)

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