MBA Survey: Share of Mortgage Loans in Forbearance Continues to Climb

The surge in unemployment claims filed since mid-March resulting from the mitigation efforts to slow the spread of the coronavirus are straining household budgets and leading to more requests for mortgage forbearance.

That is according to the Mortgage Bankers Association’s latest Forbearance and Call Volume Survey, which revealed the total number of loans in forbearance jumped from 2.73% to 3.74% during the week of March 30 to April 5. Mortgages backed by Ginnie Mae showed the largest weekly growth (1.58%) and the largest overall share in forbearance requests by investor type (5.89%), while independent mortgage bank servicers continue to have a higher share of loans in forbearance (4.17%).

“The nationwide shutdown of the economy to slow the spread of COVID-19 continues to create hardships for millions of households, and more are contacting their servicers for relief in accordance with the forbearance provisions under the CARES Act,” said MBA Chief Economist Mike Fratantoni. “The share of loans in forbearance grew the first week of April, and forbearance requests and call center volume further increased. With mitigation efforts seemingly in place for at least several more weeks, job losses will continue and the number of borrowers asking for forbearance will likely continue to rise at a rapid pace.”

Fratantoni also noted a decline in call center hold times and abandonment rates in the latest survey, “which indicates the mortgage industry is adapting to the current environment by adding or reallocating staff and increasingly utilizing its websites to help borrowers.” 

Other key findings of the MBA Forbearance and Call Volume Survey (March 30-April 5):

–Total loans in forbearance grew relative to the prior week from 2.73% to 3.74%. For the week of March 2, only 0.25% of all loans were in forbearance.

  • By investor type, Ginnie Mae loans grew the most relative to the prior week: from 4.31% to 5.89%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 1.69% to 2.44%.

–Forbearance requests as a percent of servicing portfolio volume (#) rose relative to the prior week to 2.43% from 1.36%.

–Weekly servicer call center volume:

  • As a percent of servicing portfolio volume (#), calls rose from 11.6% to 14.4%
  • Hold times decreased from 13.0 minutes to 10.3 minutes
  • Abandonment rates declined from 21% to 17%
  • Average call length rose from 7.3 minutes to 7.5 minutes from 7.3 minutes

–Loans in forbearance as a share of servicing portfolio volume (#) as of April 5, 2020:

  • Total: 3.74% (previous week: 2.73%)
  • IMBs: 4.17% (previous week: 3.45%)
  • Banks: 3.63% (previous week: 2.24%)

This Forbearance and Call Volume Survey covers the period from March 30 through April 5, and represents nearly 54% of the first-mortgage servicing market (26.9 million loans). The sample size is expected to increase in the coming weeks as more servicers respond to requests for participation.