MBA: Share of Mortgage Loans in Forbearance Drops Back to 5.48%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased to 5.48% of servicers’ portfolio volume as of December 6 from 5.54% the prior week. MBA estimates 2.7 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.26 percent – an 8-basis-point improvement. Ginnie Mae loans in forbearance decreased 21 basis points to 7.68%, while the forbearance share for portfolio loans and private-label securities increased by 19 basis points to 8.89%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 4 basis points from the previous week to 5.98%, and the percentage of loans in forbearance for depository servicers decreased 10 basis points from the previous week to 5.38%.

“The share of loans in forbearance decreased in the first week of December; however, more borrowers sought relief, with new forbearance requests reaching their highest level since the week ending August 2, and servicer call volume hitting its highest level since the week ending April 19,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Compared to the last two months, more homeowners exiting forbearance are using a modification – a sign that they have not been able to fully get back on their feet, even if they are working again.”

Fratantoni noted the latest economic data is showing a slowdown, particularly an increase in layoffs and long-term unemployment. “Coupled with the latest surge in COVID-19 cases, it is not surprising to see more homeowners seeking relief,” he said.

Key findings of MBA’s Forbearance and Call Volume Survey – November 30 – December 6

• Total loans in forbearance decreased 6 basis points relative to the prior week: from 5.54% to 5.48%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.89% to 7.68%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.34% to 3.26%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.70% to 8.89%.
• By stage, 18.72% of total loans in forbearance are in the initial forbearance plan stage, while 78.72% are in a forbearance extension. The remaining 2.56% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.08% to 0.12%.
• Of the cumulative forbearance exits for the period from June 1 through December 6:
  • 30.1% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 24.4% resulted in a loan deferral/partial claim.
  • 16.3% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 13.1% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 7.3% resulted in loans paid off through either a refinance or by selling the home.
  • 6.8% resulted in a loan modification.
  • The remaining 2.0% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
• Weekly servicer call center volume:
  • As a percent of servicing portfolio volume (#), calls increased from the previous week from 5.3% to 9.4%.
  • Average speed to answer increased from 1.7 minutes to 3.2 minutes.
  • Abandonment rates increased from 4.0% to 8.0%.
  • Average call length increased from 8.0 minutes to 8.4 minutes – a survey high.
• Loans in forbearance as a share of servicing portfolio volume (#) as of December 6:
  • Total: 5.48% (previous week: 5.54%)
  • IMBs: 5.98% (previous week: 6.02%)
  • Depositories: 5.38% (previous week: 5.48%)

MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (37.1 million loans). To subscribe to the full report, go to www.mba.org/fbsurvey.

If you are a mortgage servicer interested in participating in the survey, email fbsurvey@mba.org.