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Mortgage Market Off to Worst Start Since 2013

Despite the Federal Reserve injecting $688 billion of support into the mortgage market in March, the year-to-date excess return versus Treasuries for the Bloomberg Barclays U.S. MBS Index was -0.3% on Friday. 

This is the worst reading over a similar period since 2013, according to Bloomberg, when that reading was -0.6%. 

The report added that while April saw an excess return of 0.48%—mostly due to the $295 billion in support by the fed—last month’s $101 million in central bank brought a return of just 0.03%. 

Also, the April prepayment report saw aggregate conventional Fannie Mae 30-year speeds rise 26% following the prior month’s 42% increase. 

Although May prepayment speeds are expected to decline between 10-15%. 

Another issue is the wave of forbearance after recent legislation allowed homeowners to take advantage of these plans. As of May 17, servicers have seen 8.36% of their loans fall into forbearance, according to the Mortgage Bankers Association. 

The nationwide delinquency rate hit its highest single-month increase in history in April, according to the First Look at April mortgage performance data from Black Knight. 

According to Black Knight, some 3.6 million homeowners were past due on their mortgages as of the end of April (including the roughly 211,000 who were inactive foreclosure)—the highest number since January 2015.

This is an increase of 1.6 million since March, the largest single-month jump on record. This number includes homeowners past due on mortgage payments who are not in forbearance, as well as those currently enrolled in forbearance plans and who did not make an April mortgage payment.

The national delinquency rate nearly doubled to 6.45% from March, the largest single-month increase ever recorded, and nearly three times the previous record for a single month from back in late 2008. Delinquency increases in Nevada (+5.2%), New Jersey (+5.1%), and New York (+4.9%) led the states, while Miami (+7.2%), Las Vegas (+6.2%), and New York City (+5.4%) topped the 100 largest metro areas.

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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