Share of Mortgage Loans in Forbearance Dips to 3.25%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 1 basis point to 3.25% of servicers’ portfolio volume as of August 15 from 3.26% the week prior. MBA estimates 1.6 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 1.66%. Ginnie Mae loans in forbearance decreased 3 basis points to 3.92%, while the forbearance share for portfolio loans and private-label securities increased 10 basis points to 7.15%. The percentage of loans in forbearance for independent mortgage bank servicers increased 2 basis points to 3.48%, while the percentage of loans in forbearance for depository servicers decreased 1 basis point to 3.35%.

“The share of loans in forbearance was little changed this week, as both new requests and exits were at a slower pace compared to the prior week. In fact, exits were at their slowest pace in over a year,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “There were more new forbearance requests and re-entries for portfolio and PLS loans, leading to a 10-basis-point increase in their share. Portfolio and PLS loans now account for almost 50% of all depository servicer loans and almost 40% of IMB servicer loans in forbearance, which highlights the importance of this investor category.”

Key findings of MBA’s Forbearance and Call Volume Survey – August 9 – 15

• Total loans in forbearance decreased by 1 basis point from 3.26% to 3.25%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased from 3.95% to 3.92%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 1.69% to 1.66%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased from 7.05% to 7.15%.
• By stage, 10.0% of total loans in forbearance are in the initial forbearance plan stage, while 82.3% are in a forbearance extension. The remaining 7.7% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased from 0.06% to 0.05%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through August 15, 2021, at the time of forbearance exit:
  • 28.3% resulted in a loan deferral/partial claim.
  • 22.6% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 16.1% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 13.1% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 11.1% resulted in a loan modification or trial loan modification.
  • 7.4% resulted in loans paid off through either a refinance or by selling the home.
  • The remaining 1.4% 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 7.5% to 7.3%.
  • Average speed to answer remained the same at 1.5 minutes.
  • Abandonment rates decreased from 5.0% to 4.6%.
  • Average call length increased from 7.5 minutes to 7.9 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of August 15:
  • Total: 3.25% (previous week: 3.26%)
  • IMBs: 3.48% (previous week: 3.46%)
  • Depositories: 3.35% (previous week: 3.36%)

MBA’s 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.