MBA: Share of Mortgage Loans in Forbearance Increases to 5.54%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance increased to 5.54% of servicers’ portfolio volume as of November 22, 2020 from 5.48% the prior week. MBA estimates 2.8 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance increased for the first time in 25 weeks to 3.36 percent – a 1-basis-point increase. Ginnie Mae loans in forbearance increased 10 basis points to 7.83%, and the forbearance share for portfolio loans and private-label securities increased by 15 basis points to 8.63%. The percentage of loans in forbearance for independent mortgage bank servicers increased 9 basis points from the previous week to 6.03%, and the percentage of loans in forbearance for depository servicers increased 3 basis points to 5.47%.

“For the second week in a row, the share of loans in forbearance has increased, driven by a rise in new forbearance requests and another slowdown in the pace of forbearance exits,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “The increase was across all loan and servicer types. Even GSE loans, which had previously declined for 24 straight weeks, saw an increase last week.”

Additionally concerning, Fratantoni said, was the increase in forbearance re-entries, as borrowers who had previously exited sought relief again. “The increase in new forbearance requests may be the result of additional outreach to homeowners who had previously not taken advantage of forbearance opportunities,” he said. “However, the slowing rate of exits to a new survey low further highlights that borrowers still in forbearance are increasingly challenged by the renewed restrictions on economic activity to contain the surge in COVID-19 cases.”

Fratantoni noted recent housing market data “remain quite strong and we expect that the market is well positioned for additional growth next year, but these data show that additional support is likely needed to get through this winter.”

Key findings of MBA’s Forbearance and Call Volume Survey – November 16 – 22

• Total loans in forbearance increased 6 basis points relative to the prior week: from 5.48% to 5.54%.
  • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 7.73% to 7.83%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 3.35% to 3.36%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.48% to 8.63%.
• By stage, 20.34% of total loans in forbearance are in the initial forbearance plan stage, while 77.42% are in a forbearance extension. The remaining 2.24% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.09% to 0.11%.
• Of the cumulative forbearance exits for the period from June 1 through November 22:
  • 30.3% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 24.3% resulted in a loan deferral/partial claim.
  • 16.6% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 12.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 7.2% 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 decreased from the previous week from 8.3% to 7.7%.
  • Average speed to answer decreased from 2.3 minutes to 2.1 minutes.
  • Abandonment rates increased from 5.4% to 5.5%.
  • Average call length increased from 7.8 minutes to 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of November 22:
  • Total: 5.54% (previous week: 5.48%)
  • IMBs: 6.03% (previous week: 5.94%)
  • Depositories: 5.47% (previous week: 5.44%)

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.