MBA: Share of Mortgages in Forbearance Ticks Up

The Mortgage Bankers Association’s latest Forbearance & Call Center Survey reported loans in forbearance increased slightly to 5.49% of servicers’ portfolio volume as of December 13 from 5.49% 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 3.25% – a 1-basis-point improvement. Ginnie Mae loans in forbearance increased 11 basis points to 7.79%, while the forbearance share for portfolio loans and private-label securities decreased by 13 basis points to 8.76%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 3 basis points from the previous week to 5.95%, and the percentage of loans in forbearance for depository servicers increased 3 basis points from the previous week to 5.41%.

“The share of loans in forbearance has stayed fairly level since early November, often with small decreases in the GSE loan share and increases for Ginnie Mae loans,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “That was the case last week. Additionally, forbearance requests from Ginnie Mae borrowers reached the highest level since the week ending June 14. Additional restrictions on businesses and rising COVID-19 cases are causing a renewed increase in layoffs and other signs of slowing economic activity. These troubling trends will likely result in more homeowners seeking relief.”

Key findings of MBA’s Forbearance and Call Volume Survey – December 7-13

• Total loans in forbearance increased 1 basis point relative to the prior week: from 5.48% to 5.49%.
  • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 7.68% to 7.79%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.26% to 3.25%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.89% to 8.76%.
• By stage, 18.78% of total loans in forbearance are in the initial forbearance plan stage, while 78.54% are in a forbearance extension. The remaining 2.69% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.12%.
• Of the cumulative forbearance exits for the period from June 1 through December 13:
  • 29.8% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 24.7% resulted in a loan deferral/partial claim.
  • 16.2% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 13.2% 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.
  • 6.9% resulted in a loan modification.
  • The remaining 1.9% 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 9.4% to 8.0%.
  • Average speed to answer decreased from 3.2 minutes to 1.9 minutes.
  • Abandonment rates decreased from 8.0% to 5.3%.
  • Average call length decreased from 8.4 minutes to 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of December 13:
  • Total: 5.49% (previous week: 5.48%)
  • IMBs: 5.95% (previous week: 5.98%)
  • Depositories: 5.41% (previous week: 5.38%)

MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (37.2 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.

NOTE: MBA’s next Forbearance and Call Volume Survey will be released on Tuesday, January 5, 2021, at 4:00 p.m. ET. The release will include two weeks of data – December 14 – December 21, 2020, and December 22 – December 28, 2020.