MBA: Share of Mortgage Loans in 2-Month Holding Pattern

The Mortgage Bankers Association’s Forbearance and Call Volume Survey showed little change over the holiday season–and in fact, has shown little change over the past two months.

MBA released two weeks of data yesterday, covering Dec. 14-20 and Dec. 21-27. The surveys reported loans now in forbearance remained unchanged at 5.53% as of December 27. MBA estimated 2.7 million homeowners continue to be in forbearance plans.

The report said the share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.24% – a 2-basis-point improvement. Ginnie Mae loans in forbearance increased 5 basis points to 7.92%, while the forbearance share for portfolio loans and private-label securities decreased by 2 basis points to 8.87%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 3 basis points from the previous week to 6.01%, while the percentage of loans in forbearance for depository servicers increased 1 basis point to 5.44%.

“The share of loans in forbearance remained relatively unchanged in the final two weeks of 2020, maintaining the trend of hovering around 5.5 percent for the last two months,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “However, the share for Ginnie Mae loans continues to inch up and is now at its highest level since the week of November 1. Forbearance requests and exits both slowed markedly, and servicer call volume dropped sharply over the holidays.”

Fratantoni noted while the increasing number of COVID-19 cases continues to slow economic activity, “the passed stimulus legislation should provide financial support for many households as the vaccine rollout commences.”

Key findings of MBA’s Forbearance and Call Volume Survey – December 21 – 27

• Total loans in forbearance remained unchanged relative to the prior week at 5.53%.
  • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 7.87% to 7.92%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.26% to 3.24%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.89% to 8.87%.
• By stage, 18.27% of total loans in forbearance are in the initial forbearance plan stage, while 79.61% are in a forbearance extension. The remaining 2.11% are forbearance re-entries.

• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week from 0.10% to 0.06%, the lowest level since the week ending March 15.
• Of the cumulative forbearance exits for the period from June 1 through December 27:
  • 29.5% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 25.1% resulted in a loan deferral/partial claim.
  • 16.0% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 13.2% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 7.4% resulted in loans paid off through either a refinance or by selling the home.
  • 6.9% resulted in a 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 8.3% to 4.7%, a survey low.
  • Average speed to answer decreased from 2.0 minutes to 1.1 minutes, a survey low.
  • Abandonment rates decreased from 5.9% to 3.7%, a survey low.
  • Average call length decreased from 8.3 minutes to 7.7 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of December 27:
  • Total: 5.53% (previous week: 5.53%)
  • IMBs: 6.01% (previous week: 6.04%)
  • Depositories: 5.44% (previous week: 5.43%)

MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (37.2 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.