MBA: Share of Loans in Forbearance Flat at 5.54%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance remained unchanged from the prior week at 5.54% as of November 29. MBA estimates 2.8 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased slightly to 3.34 percent – a 2-basis-point improvement. Ginnie Mae loans in forbearance increased 6 basis points to 7.89%, and the forbearance share for portfolio loans and private-label securities increased by 7 basis points to 8.70%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 1 basis point from the previous week to 6.02%, and the percentage of loans in forbearance for depository servicers increased 1 basis point from the previous week to 5.48%.

“After two weeks of increases, the share of loans in forbearance was unchanged for the week that included Thanksgiving,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “A small decline in forbearances for GSE loans was offset by increases for Ginnie Mae and portfolio loans. While new forbearance requests declined for the week, exits slowed to a new low for the series.”

Fratantoni noted job market data for November showed an economic recovery that was slowing in response to the latest surge in COVID-19 cases. “It is not surprising to see the rate of forbearance exits slow, as households that needed forbearance assistance in October may be in even greater need now.”

Key findings of MBA’s Forbearance and Call Volume Survey – November 23 – 29

• Total loans in forbearance remained unchanged relative to the prior week at 5.54%.
  • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 7.83% to 7.89%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.36% to 3.34%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.63% to 8.70%.
• By stage, 19.81% of total loans in forbearance are in the initial forbearance plan stage, while 77.90% are in a forbearance extension. The remaining 2.29% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.11% to 0.08%.
• Of the cumulative forbearance exits for the period from June 1 through November 29:
  • 30.2% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 24.4% 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.
  • 7.3% resulted in loans paid off through either a refinance or by selling the home.
  • 6.8% 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 7.7% to 5.3% – a survey low.
  • Average speed to answer decreased from 2.1 minutes to 1.7 minutes.
  • Abandonment rates decreased from 5.5% to 4.0%.
  • Average call length remained unchanged at 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of November 29:
  • Total: 5.54% (previous week: 5.54%)
  • IMBs: 6.02% (previous week: 6.03%)
  • Depositories: 5.48% (previous week: 5.47%)

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.