Share of Mortgage Loans in Forbearance Slightly Decreases
Loans in forbearance fell for the twenty-second consecutive week, the Mortgage Bankers Association said Monday.
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey revealed the total number of loans now in forbearance decreased by 1 basis point from 3.48% of servicers’ portfolio volume in the prior week to 3.47% as of July 25.
MBA estimated there are 1.74 million homeowners currently in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 1.79%.
Ginnie Mae loans in forbearance decreased 5 basis points to 4.30%, while the forbearance share for portfolio loans and private-label securities increased 6 basis points to 7.44%.
The percentage of loans in forbearance for independent mortgage bank servicers decreased 1 basis point to 3.67%, and the percentage of loans in forbearance for depository servicers decreased 2 basis points to 3.59%.
“Forbearance exits remained low, and there was another increase in new forbearance requests, particularly for Ginnie Mae and portfolio and PLS loans. The net result was another slight decline in the share of loans in forbearance,” said MBA Senior Vice President and Chief Economist Mike Fratantoni.
Fratantoni noted while the overall number of loans in forbearance has changed little in recent weeks, forbearance re-entries have increased, reaching 7.2% this week. “Recent economic data continue to show improvement, but it’s clear many homeowners in forbearance still need the relief that is being provided,” he said.
Key findings of MBA’s Forbearance and Call Volume Survey – July 19 to July 25, 2021
• Total loans in forbearance decreased by 1 basis point relative to the prior week: from 3.48% to 3.47%. o By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 4.35% to 4.30%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.81% to 1.79%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 7.38% to 7.44%.
• By stage, 10.0% of total loans in forbearance are in the initial forbearance plan stage, while 82.8% are in a forbearance extension. The remaining 7.2% 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 0.06%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through July 25, 2021: o 28.1% resulted in a loan deferral/partial claim.
o 23.1% represented borrowers who continued to make their monthly payments during their forbearance period. o 15.6% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 13.4% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 10.8% resulted in a loan modification or trial loan modification. o 7.5% resulted in loans paid off through either a refinance or by selling the home.
o The remaining 1.5% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
• Weekly servicer call center volume: o As a percent of servicing portfolio volume (#), calls decreased relative to the prior week: from 7.8% to 5.5%.
o Average speed to answer decreased from 1.1 minutes to 0.8 minutes.
o Abandonment rates decreased from 4.1% to 3.4%.
o Average call length increased from 7.7 minutes to 7.8 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of July 25, 2021:
o Total: 3.47% (previous week: 3.48%)
o IMBs: 3.67% (previous week: 3.68%)
o Depositories: 3.59% (previous week: 3.61%)
MBA’s latest Forbearance and Call Volume Survey covers the period from July 19 through July 25, 2021, and represents 74% of the first-mortgage servicing market (36.9 million loans).