MBA: Loans in Forbearance Fall 6th Straight Week

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 24 basis points to 4.66% of servicers’ portfolio volume as of Apr. 4, from 4.90% the prior week. MBA now estimates 2.3 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.52% – a 20-basis-point improvement. Ginnie Mae loans in forbearance decreased 45 basis points to 6.33%, while the forbearance share for portfolio loans and private-label securities decreased by 15 basis points to 8.65%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 29 basis points to 4.89%, while the percentage of loans in forbearance for depository servicers declined 23 basis points to 4.80%.

MBA Chief Economist Mike Fratantoni noted the sharp drop last week was one of the largest decreases in the history of the series. “The forbearance share also decreased significantly for all three investor categories, with the rate for Ginnie Mae loans down an impressive 45 basis points,” he said. “Overall, forbearance exits increased to their fastest pace since early November. Almost 32 percent of borrowers in forbearance extensions have now exceeded the 12-month mark. In terms of performance, more than 88% of homeowners who have exited into deferral plans, modifications or repayment plans were current on their loans at the end of March, compared to 92% of all homeowners.”

“The accelerating economic recovery in March helped more homeowners recover and become current on their mortgages, in addition to helping other homeowners with more stable financial situations exit forbearance,” Fratantoni added. “Homeowners who are still facing hardships and need to extend their forbearance term should contact their servicers.”

Key findings of MBA’s Forbearance and Call Volume Survey – March 29 – April 4

• Total loans in forbearance decreased by 24 basis points relative to the prior week: from 4.90% to 4.66%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 6.78% to 6.33%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.72% to 2.52%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.80% to 8.65%.
• By stage, 13.2% of total loans in forbearance are in the initial forbearance plan stage, while 82.0% are in a forbearance extension. The remaining 4.8% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.04% to 0.05%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through April 4:
  • 26.4% resulted in a loan deferral/partial claim.
  • 26.0% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 14.5% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 14.4% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 9.5% resulted in a loan modification or trial loan modification.
  • 7.5% resulted in loans paid off through either a refinance or by selling the home.
  • The remaining 1.7% 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 increased from the previous week from 8.1% to 8.5%.
  • Average speed to answer increased from 1.7 minutes to 1.8 minutes.
  • Abandonment rates increased from 4.1% to 4.9%.
  • Average call length increased from 7.9 minutes to 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of April 4:
  • Total: 4.66% (previous week: 4.90%)
  • IMBs: 4.89% (previous week: 5.18%)
  • Depositories: 4.80% (previous week: 5.03%)

MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (36.9 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.