MBA: Loans in Forbearance Fall to 5.35%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 3 basis points to 5.35% of servicers’ portfolio volume as of Jan. 31 compared to 5.38% the prior week. MBA estimates 2.7 million homeowners are in forbearance plans.

The report said the share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.07% – a 3-basis-point improvement. Ginnie Mae loans in forbearance decreased 5 basis points to 7.46%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 2 basis points to 9.14%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 4 basis points to 5.73%, while the percentage of loans in forbearance for depository servicers decreased 1 basis point to 5.36%.

“The share of loans in forbearance decreased at the end of January across all investor categories,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Almost 14 percent of homeowners in forbearance were reported as current on their payments at the end of last month, but the share has declined nearly every month from 28 percent in May. While new forbearance requests increased slightly at the end of January, the rate of exits picked up somewhat but remained much lower than in recent months. We are anticipating a sharp increase in exits in March and April as borrowers hit the 12-month expiration of their forbearance plans.”

Fratantoni noted the job market rebounded slightly in January following a decline in December, but there are still 6.5 percent fewer jobs in the U.S. economy compared to February 2020. “The proportion of long-term unemployed also remains troubling, with 4 million people who have been actively looking for work for 27 weeks or more,” he said. “These are the homeowners who are likely to still be in forbearance and need additional support until the job market recovers to a greater extent.”

Key findings of MBA’s Forbearance and Call Volume Survey – January – 31

• Total loans in forbearance decreased by 3 basis points relative to the prior week: from 5.38% to 5.35%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.51% to 7.46%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.10% to 3.07%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 9.16% to 9.14%.
• By stage, 16.52% of total loans in forbearance are in the initial forbearance plan stage, while 80.98% are in a forbearance extension. The remaining 2.50% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.06% to 0.07%.
• Of the cumulative forbearance exits for the period from June 1, 2020 through January 31:
  • 28.4% 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.
  • 13.5% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 7.7% 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 7.2% to 8.4%.
  • Average speed to answer decreased from 2.4 minutes to 2.2 minutes.
  • Abandonment rates decreased from 6.7% to 6.2%.
  • Average call length remained unchanged relative to the prior two weeks at 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of January 31:
  • Total: 5.35% (previous week: 5.38%)
  • IMBs: 5.73% (previous week: 5.77%)
  • Depositories: 5.36% (previous week: 5.37%)

MBA’s latest Forbearance and Call Volume Survey covers represents 74% of the first-mortgage servicing market (37.0 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