MBA: Share of Loans in Forbearance Unchanged at 5.38%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance remained unchanged at 5.38% of servicers’ portfolio volume as of January 24. MBA estimates 2.7 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.10% – a 1-basis-point improvement. Ginnie Mae loans in forbearance decreased 10 basis points to 7.51%, while the forbearance share for portfolio loans and private-label securities increased by 22 basis points to 9.16%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 2 basis points to 5.77%, while the percentage of loans in forbearance for depository servicers increased 1 basis point to 5.37%.

“While new forbearance requests dropped slightly, the rate of exits from forbearance was at the slowest pace since MBA began tracking exit data last summer,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Overall, the forbearance numbers have been little changed over the past few months. Homeowners still in forbearance are likely facing ongoing challenges with lost jobs, lost income and other impacts from the pandemic.”

Fratantoni noted the share of loans in forbearance was unchanged in the prior week, with a gain in the portfolio/PLS loan segment offset by declines in the Ginnie Mae and GSE investor loan categories. “When servicers buy out delinquent loans from Ginnie Mae pools, they are reclassified as portfolio loans, which can lead to a decrease in the Ginnie Mae forbearance share and an increase in the portfolio/PLS share,” he said.

Key findings of MBA’s Forbearance and Call Volume Survey – January 18-24

• Total loans in forbearance remained unchanged relative to the prior week at 5.38%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.61% to 7.51%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.11% to 3.10%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.94% to 9.16%.
• By stage, 18.07% of total loans in forbearance are in the initial forbearance plan stage, while 79.30% are in a forbearance extension. The remaining 2.64% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.07% to 0.06%.
• Of the cumulative forbearance exits for the period from June 1, 2020 through January 24:
  • 28.6% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 25.5% resulted in a loan deferral/partial claim.
  • 15.6% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 13.4% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 7.5% 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 1.9% 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 the previous week from 9.1% to 7.2%.
  • Average speed to answer remained unchanged relative to the prior week at 2.4 minutes.
  • Abandonment rates increased from 6.4% to 6.7%.
  • Average call length remained unchanged relative to the prior week at 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of January 24:
  • Total: 5.38% (previous week: 5.38%)
  • IMBs: 5.77% (previous week: 5.79%)
  • Depositories: 5.37% (previous week: 5.36%)

MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (37.1 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.