IMB Losses Improved In Q1 2024

The first quarter of 2024 brought a significant profitability upswing for independent mortgage banks as production losses simmered down from previous quarters. According to data from the Mortgage Bankers Association, IMBs and mortgage subsidiaries of chartered banks experienced a significant decrease in pretax net loss per loan in Q1 compared to the previous quarter.  The average loss per loan dropped to $645 from Q4 2023’s astonishing $2,109, one the highest levels in the survey’s history. Marina Walsh, MBA’s vice president of industry analysis, noted that although this marks the eighth consecutive quarter of net production losses, they were less severe than before.  “In basis points, production revenue rose above the historical average, and production costs declined. This led to an…

Delinquencies Rise But Loss Mitigation Efforts Prevent Foreclosure

By KIMBERLEY HAAS Distressed homeowners who get behind on their mortgage bills are avoiding foreclosure. The Mortgage Bankers Association’s National Delinquency Survey was released last week and it showed that delinquencies increased in the third quarter to a rate of 3.62%, up 25 basis points from the second quarter and 17 basis points from a year ago. Marina Walsh, MBA’s vice president of industry analysis, said that despite the increase, later-stage delinquencies – those 90 days or more past due – declined to the lowest level since the first quarter of 2020. “The decline in later-stage delinquencies, along with a foreclosure starts rate of 0.14% – which is well below the historical quarterly average of 0.40% – suggest that distressed…

MBA Annual Convention And Expo Kicks Off In Philadelphia

By KIMBERLEY HAAS The Mortgage Bankers Association’s chief economist and his team had some good news for those in attendance of their annual convention and expo on Sunday afternoon. Total mortgage origination volume is expected to be $1.95 trillion in 2024, up from the $1.64 trillion projected for 2023. At the same time, volume is predicted to increase 19% by loan count, with 5.2 million loans expected next year. Michael Fratantoni, chief economist and senior vice president of research and industry technology, said members just have to make it through the winter. “In terms of origination volume, we think 2023 is the low point,” Fratantoni said, adding that many lenders have had five or six quarters of production losses. In…

Delinquencies Rose Again In February, But Prepayment Activity Is Up

Delinquencies across the nation rose in February to 3.45% as economic pressures squeeze Americans, but remain down from last year, Black Knight reported. Black Knight’s First Look at February 2023 data found that delinquent loans that are only a single payment behind overwhelmingly accounted for the increase. The 36,000 delinquency rise was driven by a 65,000 increase in first-time missed payments. Delinquencies of 60 and 90 days both fell, down by 12,000 (-4%) and 17,000 (-3%) respectively. Nearly all fifty states saw their serious delinquencies improve. On the other end, foreclosure starts also improved, breaking a streak of increases with a 9% dip. Starts remain almost 20% below pre-pandemic levels. Active foreclosure inventory increased slightly and is up 15% from…

Delinquencies Down Nearly 40% YOY

The delinquency rate nationwide dropped to 2.80% in April, as overall delinquencies fell almost 40% YOY, according to Black Knight’s “first look” at its April 2022 month-end mortgage performance stats. The numbers reflect the mortgage market’s continued recovery from pandemic impacts. Prepayment activity dropped 19.1% from March and is down 61.8% YOY due to rapidly increasing interest rates. Rates averaged 5.25% last week. The number of borrowers who are a single payment overdue rose 7.9% month-over-month, which Black Knight says is typical of the season. That increase was offset by improvements among more seriously delinquent borrowers. The volume of borrowers three or more months past due fell by 8% from the month prior. Serious delinquencies are down between 6% and…

Forbearances Fell Below 700k For The First Time Since The Pandemic Began

Early April exits offset two weeks of rising forbearance starts and re-starts, resulting in plan volumes dropping below 700,000 for the first time since the pandemic began, according to Black Knight’s blog, Vision. Overall, forbearances fell by 63,200 plans last week. GSE plans fell by 24,500 (-11%), followed by FHA/VA (-21,800, -8.1%) and loans held by portfolios and PSLs (-17,000, -16.7%). New plan starts still rose slightly, up to 10,300 (+200). However, last week they dropped to their lowest level in four months, so the uptick may not be cause for concern. Restarts also rose by 1,400 to 21,600. Plan volume is down 66,200 (-8.8%) month-over-month.  Forbearance volumes have ticked up some after long periods of decline, but are generally…

New Plan Starts Drop To Lowest Level In Four Months

Forbearances rose slightly again as late-month new plans and restarts offset early-month exits, according to Black Knight’s blog, Vision. Overall, forbearances rose by 3,700. Forborne loans held by portfolios and PSLs increased by 5,300 (2.1%). FHA/VA loans remained unchanged, while GSE plans fell by 1,800 (0.8%). New plan starts dropped to 10,100, the lowest level in four months. Restarts fell by 11,500 to 20,200. Plan volume is down 40,000 (-5.1%) month-over-month.  Forbearance volumes have ticked up some after long periods of decline, but are generally improving as the country recovers from the pandemic. The number of homeowners with existing loan workouts who were current on their payments rose in February for the first time since June 2021. “We can credit…

IMB Profits Dropped In Q4

Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks made $1,099 on each originated loan in Q4 2021, dropping from Q3’s $2,594, according to the Mortgage Bankers Association’s (MBA) Quarterly Mortgage Bankers Performance Report. More than three-fourths (76%) of firms analyzed made a net profit in Q4, especially firms with servicing operations. Those benefited from slower prepayments and low delinquencies which boosted their MSR valuations. But it’s a decrease from Q3’s rate of 92%. Plus, if no firms in the study had servicing operations, only 58% would have made a net profit last quarter. “Production margins tightened substantially in the fourth quarter of 2021. After a two-year run of above-average profitability, pre-tax net production income per loan reached its…

New Jersey Homeowners Can Apply For Up To $35K In Mortgage Assistance

By KIMBERLEY HAAS Eligible homeowners in New Jersey can receive up to $35,000 to help protect themselves against foreclosures. Officials at the New Jersey Housing and Mortgage Finance Agency have opened an application portal for the Emergency Rescue Mortgage Assistance program. The money, which comes in the form of a three-year forgivable loan with no interest or payments due, can be used for the following: -Mortgage reinstatement -Escrow shortages -Delinquent property taxes -Municipal or property tax liens -Mortgage payments, including principal, interest, taxes, and homeowner’s insurance To qualify for assistance, a homeowner must: -Own and occupy an eligible one- to four-unit primary residence -Have been current on mortgage and property taxes as of January 2020 -Have experienced a COVID-19 related…

Delinquencies Fell To 4.65% In Q4 2021

Delinquencies on residential properties fell to 4.65% of all outstanding loans in Q4 2021, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The delinquency rate fell 23 basis points from Q3 2021 and 208 basis points year-over-year (YOY). Q4’s delinquency rate was 67 basis points lower than MBA’s survey average of 5.32%, while the rate for seriously delinquent loans was 2.83%, close to the longer-term average of 2.80%. MBA’s survey classifies loans as delinquent if the payment was not made based on the original terms of the mortgage. “Mortgage delinquencies descended in the final three months of 2021, reaching levels at or below MBA’s survey averages dating back to 1979,” said Marina Walsh, CMB, MBA’s Vice President of…