Share of Mortgage Loans in Forbearance Slightly Dips to 3.48%
Loans in forbearance fell for the 21st consecutive week, the Mortgage Bankers Association said on Monday.
The latest MBA Forbearance and Call Volume Survey reported loans now in forbearance decreased by 2 basis points to 3.48% of servicers’ portfolio volume as of July 18 from 3.5% the prior week. MBA estimates 1.74 million homeowners are in forbearance plans.
The report said the share of Fannie Mae and Freddie Mac loans in forbearance decreased by 2 basis points to 1.81%. Ginnie Mae loans in forbearance decreased by 1 basis point to 4.35%, while the forbearance share for portfolio loans and private-label securities increased by 5 basis points to 7.38%. The percentage of loans in forbearance for independent mortgage bank servicers was unchanged at 3.68%, while the percentage of loans in forbearance for depository servicers decreased by 1 basis point to 3.61%.
“As is typical for mid-month reporting, forbearance exits slowed, and there was a slight increase in new requests,” said MBA Chief Economist Mike Fratantoni. “The net result was a small drop in the share of loans in forbearance – the 21st consecutive week of declines.”
Key findings of MBA’s Forbearance and Call Volume Survey – July 12 -18
• Total loans in forbearance decreased by 2 basis points from 3.50% to 3.48%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased from 4.36% to 4.35%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 1.83% to 1.81%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance increased from 7.33% to 7.38%.
• By stage, 9.8% of total loans in forbearance are in the initial forbearance plan stage, while 83.2% are in a forbearance extension. The remaining 7.0% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased from 0.03% to 0.04%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through July 18, 2021:
o 28.0% resulted in a loan deferral/partial claim.
o 23.2% represented borrowers who continued to make their monthly payments during their forbearance period.
o 15.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 13.4% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 10.8% resulted in a loan modification or trial loan modification.
o 7.4% resulted in loans paid off through either a refinance or by selling the home.
o The remaining 1.5% 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 6.4% to 7.8%.
o Average speed to answer decreased from 2.0 minutes to 1.1 minutes.
o Abandonment rates decreased from 4.7% to 4.1%.
o Average call length decreased from 8.1 minutes to 7.7 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of July 18:
o Total: 3.48% (previous week: 3.50%)
o IMBs: 3.68% (previous week: 3.68%)
o Depositories: 3.61% (previous week: 3.62%)
MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (36.9 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 firstname.lastname@example.org.