MBA: Share of Mortgage Loans in Forbearance Declines to 5.22%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 7 basis points to 5.22% of servicers’ portfolio volume as of Feb. 14 compared to 5.29% the prior week. MBA estimates 2.6 million homeowners remain in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.97% – a 4-basis-point improvement. Ginnie Mae loans in forbearance decreased 2 basis points to 7.32%, while the forbearance share for portfolio loans and private-label securities decreased by 20 basis points to 8.94%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 15 basis points to 5.54%, while the percentage of loans in forbearance for depository servicers increased 2 basis points to 5.28%.

“The share of loans in forbearance has declined for three weeks in a row, with portfolio and PLS loans decreasing the most this week,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “This decline was due to a sharp increase in borrower exits, particularly for IMB servicers. Requests for new forbearances dropped to 6 basis points, matching a survey low.”

Fratantoni noted the housing market is “quite strong, with home sales, home construction and home price data all testifying to this strength. Policymakers and the mortgage industry have helped enable this during the pandemic by providing millions of homeowners support in the form of forbearance. The decision to extend the allowable duration of forbearance plans should provide for a smoother transition this year as the job market continues to recover.”

Key findings of MBA’s Forbearance and Call Volume Survey – February 8-14

• Total loans in forbearance decreased by 7 basis points relative to the prior week: from 5.29% to 5.22%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.34% to 7.32%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.01% to 2.97%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 9.14% to 8.94%.
• By stage, 15.9% of total loans in forbearance are in the initial forbearance plan stage, while 81.6% are in a forbearance extension. The remaining 2.5% 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 February 14:
  • 27.9% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 25.8% resulted in a loan deferral/partial claim.
  • 15.4% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 13.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 7.8% 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 1.8% 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 9.2% to 9.3%.
  • Average speed to answer decreased from 3.2 minutes to 2.3 minutes.
  • Abandonment rates decreased from 8.1% to 6.0%.
  • Average call length decreased from 8.2 minutes to 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of February 14:
  • Total: 5.22% (previous week: 5.29%)
  • IMBs: 5.54% (previous week: 5.69%)
  • Depositories: 5.28% (previous week: 5.26%)

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.