Fitch: Serious RMBS Delinquencies Trending Positively; Early Delinquencies Remain Flat
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Fitch Ratings, New York, said servicers continue to work with struggling homeowners to avoid loan default, as early delinquencies remain flat and late stage delinquencies show positive movement.
“While loan portfolio delinquencies for Fitch-rated bank and non-bank servicers were flat or modestly improved for the fifth consecutive quarter, the impact of borrower assistance programs and successful workout strategies is holding new foreclosure filings to a minimum,” Fitch Director Richard Koch said.
Bank servicers reported more loan modification requests as a percentage of all loss mitigation volume quarter over quarter. That figure increased to 31% from 25% in late 2022. Non-bank servicers saw volume dip to 13% from 17% in late 2022, Fitch said in its quarterly U.S. RMBS Servicer Metric Report (subscription) non-rating commentary. Active forbearance plans for bank servicers increased quarter over quarter to 36% from 11.5% as a percentage of loss mitigation volume, which indicates an influx of applications from borrowers that had not previously exhausted forbearance. Non-bank servicers reported a decrease in forbearance plans to 35% from 47%, quarter over quarter, the report said.
“Bankruptcy caseloads showed no significant change quarter over quarter for bank and non-bank servicers, while foreclosure volume increased by 1% for bank servicers and decreased 1% for non-bank servicers,” Fitch said. “Bank and non-bank servicers both showed a decrease of 1% in their reported 90+ day delinquencies.”
Real Estate Owned inventory trends reflect a continuing decrease in highly aged (greater than 360 days) inventory as servicers continue to work through their post-pandemic REO inventory. “However, servicers reported a steady increase in new REO properties in all buckets prior to the 360-plus day category, reflecting the steady resumption of active foreclosure filings that commenced in fourth-quarter 2022,” Fitch said.
