MBA: Share of Mortgage Loans in Forbearance Increases Slightly to 5.38%
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance increased slightly to 5.38% of servicers’ portfolio volume as of Jan. 17 from 5.38% the prior week. MBA estimates 2.7 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.11% – a 2-basis-point improvement. Ginnie Mae loans in forbearance decreased 6 basis points to 7.61%, while the forbearance share for portfolio loans and private-label securities increased by 26 basis points to 8.94%. The percentage of loans in forbearance for independent mortgage bank servicers remained unchanged relative to the prior week at 5.79%, while the percentage of loans in forbearance for depository servicers increased 3 basis points to 5.36%.
“The small increase in the share of loans in forbearance was led by a gain in the portfolio/PLS loan segment. The good news is that the forbearance numbers for GSE loans continues to decline more consistently, as these borrowers typically have stronger credit and more stable employment,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “The rate of exits from forbearance slowed in the prior week, while the rate of new forbearance requests remained steady at a low level.”
Fratantoni noted latest housing market data show “strong momentum entering 2021, with both the pace of home sales and new construction booming. We expect that this strong market could benefit homeowners who need to sell their home, as record-low inventory is causing for-sale homes to go under contract quickly and is pushing up home prices.”
Key findings of MBA’s Forbearance and Call Volume Survey – January 11 – 17
• Total loans in forbearance decreased by 1 basis point relative to the prior week: from 5.37% to 5.38%.
— By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.67% to 7.61%.
— The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.13% to 3.11%.
— The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.68% to 8.94%.
• By stage, 18.17% of total loans in forbearance are in the initial forbearance plan stage, while 79.31% are in a forbearance extension. The remaining 2.52% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior two weeks at 0.07%.
• Of the cumulative forbearance exits for the period from June 1, 2020 through January 17:
— 28.7% represented borrowers who continued to make their monthly payments during their forbearance period.
— 25.4% resulted in a loan deferral/partial claim.
— 15.7% 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 loans paid off through either a refinance or by selling the home.
— 7.4% resulted in a loan modification or trial loan modification.
— 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 9.2% to 9.1%.
— Average speed to answer decreased from 3.6 minutes to 2.4 minutes.
— Abandonment rates decreased from 9.1% to 6.4%.
— Average call length decreased from 8.5 minutes to 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of January 17, 2021:
— Total: 5.38% (previous week: 5.37%)
— IMBs: 5.79% (previous week: 5.79%)
— Depositories: 5.36% (previous week: 5.33%)
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 fbsurvey@mba.org.
