MBA: Share of Mortgage Loans in Forbearance Decreases for Seventh Straight Week

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported the total number of loans in forbearance decreased 7 basis points to 7.67% of servicers’ portfolio volume as of July 26 from 7.74% in the prior week.

MBA now estimates 3.8 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the eighth week in a row to 5.41%, an 8-basis-point improvement. Ginnie Mae loans in forbearance increased by 1 basis point to 10.28%, and the forbearance share for portfolio loans and private-label securities decreased by 16 basis points to 10.37%. The percentage of loans in forbearance for depository servicers dropped to 7.95%, while the percentage of loans in forbearance for independent mortgage bank servicers decreased to 7.81%.

“The share of loans in forbearance declined, but we are now seeing a notable pattern developing over the past two weeks,” said MBA Senior Vice President and Chief Economist Mike Fratantoni. “The forbearance share is decreasing for GSE loans but has slightly increased for Ginnie Mae loans. The job market has cooled somewhat over the past few weeks, with layoffs increasing and other indications that the economic rebound may be losing some steam because of the rising COVID-19 cases throughout the country. It is therefore not surprising to see this situation first impact the Ginnie Mae segment of the market.”

Fratantoni noted the higher level of Ginnie Mae loans in forbearance will increase the amount of payments that servicers must advance. “We continue to monitor servicer liquidity during these challenging times,” he said.

Key findings of MBA’s Forbearance and Call Volume Survey – July 20 to July 26, 2020

•             Total loans in forbearance decreased by 7 basis points relative to the prior week: from 7.74% to 7.67%.

o             By investor type, the share of Ginnie Mae loans in forbearance increased: from 10.27% to 10.28%.

o             The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 5.49% to 5.41%.

o             The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 10.53% to 10.37%.

•             Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week from 0.13% to 0.10% – the lowest level reported since early March.

•             Weekly servicer call center volume:

o             As a percent of servicing portfolio volume (#), calls decreased from 9.0% to 6.7%.

o             Average speed to answer decreased from 2.6 minutes to 2.4 minutes. 

o             Abandonment rates decreased from 6.8% to 5.0%.

o             Average call length increased slightly from 7.2 minutes to 7.3 minutes.

•             Loans in forbearance as a share of servicing portfolio volume (#) as of July 26, 2020:

o             Total: 7.67% (previous week: 7.74%)

o             IMBs: 7.81% (previous week: 7.85%)

o             Depositories: 7.95% (previous week: 8.06%) MBA’s latest Forbearance and Call Volume Survey covers the period from July 20 through July 26, 2020, and represents 75% of the first-mortgage servicing market (37.3 million loans).