MBA: Loans in Forbearance Fall to 10-Month Low
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 6 basis points to 5.29% of servicers’ portfolio volume as of Feb. 7–the lowest percentage in more than 10 months.
Loans in forbearance fell from 5.35% of servicers’ portfolio volume in the prior week. MBA’s estimates 2.6 million homeowners are in forbearance plans.
The report said the share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.01% – a 6-basis-point improvement. Ginnie Mae loans in forbearance decreased 12 basis points to 7.34%, while the forbearance share for portfolio loans and private-label securities remained unchanged relative to the prior week at 9.14%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 4 basis points to 5.69%, and the percentage of loans in forbearance for depository servicers decreased 10 basis points to 5.26%.
“The share of loans in forbearance declined to the lowest level since April 5 of last year, due to decreases in both the GSE and Ginnie Mae portfolios,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Similar to the trend in recent months, the first week of February showed a faster pace of exits from forbearance compared to recent weeks, while new forbearance requests were unchanged.”
Fratantoni noted, however, a large number of Americans remain in forbearance plans. “MBA expects the rollout of the vaccines to boost economic growth through the course of the year, leading to a stronger job market and a greater ability for more struggling homeowners to get back on their feet,” he said. “We do believe that additional support is needed until they have regained their jobs and incomes.”
Key findings of MBA’s Forbearance and Call Volume Survey – February 1-7:
• Total loans in forbearance decreased by 6 basis points relative to the prior week: from 5.35% to 5.29%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.46% to 7.34%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.07% to 3.01%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance remained unchanged relative to the prior week at 9.14%.
• By stage, 16.07% of total loans in forbearance are in the initial forbearance plan stage, while 81.42% are in a forbearance extension. The remaining 2.51% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained unchanged relative to the prior week at 0.07%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through February 7:
o 28.2% represented borrowers who continued to make their monthly payments during their forbearance period.
o 25.5% resulted in a loan deferral/partial claim.
o 15.4% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 13.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 7.7% 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 1.9% 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 increased from the previous week from 8.4% to 9.2%.
o Average speed to answer increased from 2.2 minutes to 3.2 minutes.
o Abandonment rates increased from 6.2% to 8.1%.
o Average call length increased from 8.0 minutes to 8.2 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of February 7:
o Total: 5.29% (previous week: 5.35%)
o IMBs: 5.69% (previous week: 5.73%)
o Depositories: 5.26% (previous week: 5.36%)
MBA’s latest Forbearance and Call Volume Survey 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 email@example.com.