MBA: Homeowners in Forbearance Plans Fall to under 2 Million

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey showed loans now in forbearance decreased by 4 basis points to 3.87% of servicers’ portfolio volume as of June 27 from 3.91% the prior week. MBA estimates 1.9 million homeowners are in forbearance plans–the first time that two million or fewer homeowners have been in forbearance plans since March 2020, at the onset of coronavirus pandemic.

The share of loans in forbearance fell for the 18th straight week.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased by 3 basis points to 1.99%. Ginnie Mae loans in forbearance decreased by 3 basis points to 5.10%, while the forbearance share for portfolio loans and private-label securities decreased by 5 basis points to 7.92%. The percentage of loans in forbearance for independent mortgage bank servicers decreased by 3 basis points to 4.00%, while the percentage of loans in forbearance for depository servicers declined by 3 basis points to 4.11%.

“For the first time since last March, the share of Fannie Mae and Freddie Mac loans in forbearance dropped below 2 percent. The share in every investor type and almost every loan category dropped as well, bringing the number of homeowners in forbearance below 2 million,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “The rate of forbearance exits and new forbearance requests remained at low levels, but we expect the pace of exits to increase with reporting next week for the beginning of July.”

Fratantoni added strong job growth in June “should provide a springboard for further improvements in the forbearance numbers over the next month.”

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

• Total loans in forbearance decreased by 4 basis points from the prior week: from 3.91% to 3.87%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased from 5.13% to 5.10%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 2.02% to 1.99%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased from 7.97% to 7.92%.
• By stage, 10.8% of total loans in forbearance are in the initial forbearance plan stage, while 82.9% are in a forbearance extension. The remaining 6.3% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same at 0.04%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through June 27, 2021:
  • 27.9% resulted in a loan deferral/partial claim.
  • 23.8% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 15.2% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 13.7% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 10.4% 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 1.5% 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 7.2% to 5.9%.
  • Average speed to answer decreased from 1.5 minutes to 1.0 minutes.
  • Abandonment rates decreased from 4.9% to 3.3%.
  • Average call length increased from 7.6 minutes to 7.8 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of June 27:
  • Total: 3.87% (previous week: 3.91%)
  • IMBs: 4.00% (previous week: 4.03%)
  • Depositories: 4.11% (previous week: 4.14%)

MBA’s 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.