MBA: Share of Mortgage Loans in Forbearance Increases to 7.54%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey showed loans now in forbearance increased from 6.99% of servicers’ portfolio volume in the prior week to 7.54% as of April 26. According to MBA’s estimate, 3.8 million homeowners are now in forbearance plans.

Mortgages backed by Ginnie Mae saw the largest overall share of loans in forbearance by investor type (10.45%). Loans in forbearance for depository servicers rose to 8.41%, while loans in forbearance for independent mortgage bank servicers increased to 7.13%.

“The share of loans in forbearance increased once again in the last full week of April, but the pace of new requests slowed,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “With millions more Americans filing for unemployment over the week, the level of job market distress continues to worsen. That is why we expect that the share of loans in forbearance will continue to grow, particularly as new mortgage payments come due in May.”

Fratantoni noted as states across the country begin to re-open their economies, “a silver lining we are seeing is indications of increased activity in the housing market, including more purchase applications in some markets. We are hopeful that the housing market can eventually contribute to a broader rebound in economic activity, which would then begin to reverse the unprecedented job losses experienced during this crisis.”  

Key findings of MBA Forbearance and Call Volume Survey – April 20-26

• Total loans in forbearance grew relative to the prior week from 6.99% to 7.54%. In comparison, only 0.25% of all loans were in forbearance for the week of March 2.
  • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 9.73% to 10.45%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 5.46% to 5.85%.
  • The share of other loans (e.g. private label securities and portfolio loans) in forbearance increased relative to the prior week: from 7.52% to 8.30%.
• Forbearance requests as a percent of servicing portfolio volume (#) dropped across all investor types for the third consecutive week relative to the prior week: from 1.14% to 0.63%.
• Weekly servicer call center volume:  
  • As a percent of servicing portfolio volume (#), calls decreased from 10.0% to 7.2%, the lowest level reported for this survey series that began in early March.
  • Average speed to answer dropped relative to the prior week from 5.0 minutes to 2.4 minutes.
  • Abandonment rates decreased from 9.9% to 5.8%.
  • Average call length declined for first time in six weeks – from 7.7 minutes to 6.9 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of April 26:
  • Total: 7.54% (previous week: 6.99%)
  • IMBs: 7.13% (previous week: 6.52%)
  • Depositories: 8.41% (previous week: 7.87%)

MBA’s latest Forbearance and Call Volume Survey covers April 20-26 and represents nearly 77% of the first-mortgage servicing market (38.4 million loans).