By MaineHousing Finance Director Darren Brown
The delinquency rate for MaineHousing’s single-family loan portfolio is now under 4% for the first time in about twenty years. The current rate is 3.89% and represents a reduction of 731 basis points from the agency’s historical high rate of 11.2%. The delinquency and foreclosure rates have steadily increased each year since the housing crisis in 2008. The delinquency rate reached an all-time high in 2012, when there were over $100 million in loans that were two or more months delinquent. About 6% of the portfolio or $50 million of loans were in foreclosure. Loans in foreclosure have decreased by 76% since the historical high.
Improvement with the economy and lower unemployment rates have helped to lower delinquency rates. However, the Loan Administration staff have worked very hard to keep the delinquencies and foreclosures at manageable levels in recent years and to attain the current low rates.
New program and borrower outreach initiatives were developed and implemented. The options available under the agency’s loan modification program were expanded and the Maine HomeOwnership Protection for unEmployed (HOPE) and Maine Housing Home Affordable Modification Program (HAMP) programs were developed to assist borrowers not otherwise served.
Outreach efforts were developed to proactively contact borrowers at the earliest sign of distress. Instructional brochures providing information to borrowers on what to do if they were having difficulty making their payments were developed and made available to all borrowers. A calling campaign was also conducted to discuss the various workout options available to the borrower and to answer questions and provide guidance on how to obtain needed assistance.
MaineHousing’s new sub-servicer, Mortgage Servicing Solutions (MSS), which is an entity of Rhode Island Housing, has also contributed to the delinquency rate decline. MSS started servicing about 70% of MaineHousing’s loans in January of this year and they have done an outstanding job. The delinquency rate has been reduced by 150 basis points during the first six months of our arrangement with MSS.
Their experience and familiarity with our government insured loans has been instrumental in serving our borrowers and lowering the delinquency rates. MSS is rated a “Top Tier” servicer with HUD due to their successful engagement in borrower workout activities. In addition, they provide 24 /7 access for our borrowers through their Customer Care Web portal where borrowers can look up their loan information, make payments, get answers to frequently asked questions, and post inquiries.
Our overall collaborative working arrangement with MSS and our extensive outreach efforts with borrowers has allowed us to reduce our delinquency levels. The continuing hard work of the Loan Administration staff and MSS should help to lower delinquency rates even further.