Share of Mortgage Loans in Forbearance Decreases to 5.83%
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey revealed the total number of loans now in forbearance decreased by 7 basis points from 5.90% of servicers’ portfolio volume in the prior week to 5.83% as of October 25, 2020.
According to MBA’s estimate, 2.9 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 21st week in a row to 3.66% – a 6-basis-point improvement. Ginnie Mae loans in forbearance decreased 4 basis points to 8.13%, and the forbearance share for portfolio loans and private-label securities decreased by 8 basis points to 8.82%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 8 basis points to 6.27%, while the percentage of loans in forbearance for depository servicers remained unchanged from the previous week at 5.86%.
“With more borrowers exiting forbearance in the prior week, the share of loans in forbearance declined across all loan types,” said MBA Senior Vice President and Chief Economist Mike Fratantoni. “Almost half of forbearance exits to date have been from borrowers who remained current while in forbearance, or who were reinstated by paying back past-due amounts.”
Fratantoni said the share of loans in forbearance has returned to levels last seen in early April. “But it still remains remarkably high,” he said. “Further improvement will require ongoing recovery in the job market, as well as additional fiscal stimulus.”
Key findings of MBA’s Forbearance and Call Volume Survey – October 19 to October 25, 2020
- Total loans in forbearance decreased by 7 basis points relative to the prior week: from 5.90% to 5.83%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 8.17% to 8.13%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.72% to 3.66%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.90% to 8.82%.
- By stage, 23.95% of total loans in forbearance are in the initial forbearance plan stage, while 74.49% are in a forbearance extension. The remaining 1.56% 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 0.10%.
- Of the cumulative forbearance exits for the period from June 1 through October 25, 2020:
- 32.0% represented borrowers who continued to make their monthly payments during their forbearance period.
- 23.8% resulted in a loan deferral/partial claim.
- 17.2% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 10.9% 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.
- 6.9% 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 8.9% to 6.7%.
- Average speed to answer decreased from 3.0 minutes to 1.8 minutes.
- Abandonment rates decreased from 6.8% to 5.1%.
- Average call length increased from 7.6 minutes to a survey-high 7.9 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of October 25, 2020:
- Total: 5.83% (previous week: 5.90%)
- IMBs: 6.27% (previous week: 6.35%)
- Depositories: 5.86% (previous week: 5.86%)
MBA’s latest Forbearance and Call Volume Survey covers the period from October 19 through October 25, 2020, and represents 75% of the first-mortgage servicing market (37.3 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 firstname.lastname@example.org.