MBA Weekly Survey: Share of Mortgage Loans in Forbearance Rises to 5.95%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported the total number of loans now in forbearance jumped from 3.74% of servicers’ portfolio volume in the prior week to 5.95% as of April 12.

Mortgages backed by Ginnie Mae showed the largest growth (2.37%) from the prior week and the largest overall share in forbearance by investor type (8.26%). Depository servicers – at 6.57% – surpassed independent mortgage bank servicers (5.69%) for the highest share of loans in forbearance.

“With over 22 million Americans filing for unemployment over the past month, homeowners are contacting their mortgage servicers seeking relief, leading to a sharp increase in the share of loans in forbearance across all loan types,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Mortgage servicers continue to receive a very high level of forbearance requests, but volumes were down somewhat compared to the prior week.

Fratantoni said given that lockdowns and associated job losses will continue in the coming weeks, forbearance inquiries will likely rise again with May payment due dates. “Borrowers facing COVID-19-related hardships should contact their servicer to review all of their options,” he said. “Mortgage servicers are performing an essential function of the housing finance system by continuing to advance funds to investors at a time when roughly 3 million homeowners are now in forbearance. To ensure market stability during these challenging times for consumers and the entire industry, servicers need access to interim financing so that they can continue to play this critical role.” 

Key findings of MBA’s Forbearance and Call Volume Survey – April 6-12:

• Total loans in forbearance grew relative to the prior week from 3.74% to 5.95%. In comparison, only 0.25% of all loans were in forbearance for the week of March 2.
  • By investor type, Ginnie Mae loans grew the most relative to the prior week: from 5.89% to 8.26%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 2.44% to 4.64%.
• Forbearance requests as a percent of servicing portfolio volume (#) dropped relative to the prior week: from 2.43% to 1.79%.
• Weekly servicer call center volume:  
  • As a percent of servicing portfolio volume (#), calls dropped from 14.4% to 8.8%.
  • Hold times decreased from 10.3 minutes to 4.9 minutes.
  • Abandonment rates declined from 17.0% to 9.7%.
  • Average call length rose from 7.5 minutes to 7.6 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of April 12, 2020:
  • Total: 5.95% (previous week: 3.74%)
  • IMBs: 5.69% (previous week: 4.17%)
  • Banks: 6.57% (previous week: 3.63%)

MBA’s latest Forbearance and Call Volume Survey covers the period from April 6 through April 12, 2020, and represents almost 77% of the first-mortgage servicing market (38.3 million loans).