MBA: Share of Mortgage Loans in Forbearance Falls 17th Straight Week
Loans in forbearance fell for the 17th straight week–and for the second straight week, remained below 4 percent–the Mortgage Bankers Association reported Monday.
The MBA latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 2 basis points to 3.91% of servicers’ portfolio volume as of June 20, from 3.93% the prior week. MBA estimates 2 million homeowners are in forbearance plans.
The report said the share of Fannie Mae and Freddie Mac loans in forbearance decreased by 3 basis points to 2.02%. Ginnie Mae loans in forbearance decreased by 2 basis points to 5.13%, while the forbearance share for portfolio loans and private-label securities decreased by 1 basis point to 7.97%. The percentage of loans in forbearance for independent mortgage bank servicers decreased by 2 basis points to 4.03%, while the percentage of loans in forbearance for depository servicers declined by 2 basis points to 4.14%.
“The share of loans in forbearance declined for the 17th straight week, with small declines across almost every loan category,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “The rate of forbearance exits slowed – as has been typical in mid-month reports – but the pace of new forbearance requests remained at a very low level of 4 basis points.”
Fratantoni noted the steady improvement in the aggregate forbearance numbers is “heartening,” as it is evidence that improving economic conditions are allowing more homeowners to get back on their feet. “However, we continue to closely monitor the number of forbearance re-entries, reflecting borrowers who exited forbearance but had to re-enter due to hardships,” he said. “These re-entries accounted for 6.2 percent of loans in forbearance this week.”
Key findings of MBA’s Forbearance and Call Volume Survey – June 14 – 20
• Total loans in forbearance decreased by 2 basis points from 3.93% to 3.91%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased from 5.15% to 5.13%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 2.05% to 2.02%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased from 7.98% to 7.97%.
• By stage, 10.7% of total loans in forbearance are in the initial forbearance plan stage, while 83.1% are in a forbearance extension. The remaining 6.2% 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 20, 2021:
o 27.8% resulted in a loan deferral/partial claim.
o 23.9% represented borrowers who continued to make their monthly payments during their forbearance period.
o 15.2% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 13.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 10.3% 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 1.5% 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 7.0% to 7.2%.
o Average speed to answer increased from 1.3 minutes to 1.5 minutes.
o Abandonment rates increased from 4.2% to 4.9%.
o Average call length decreased from 7.8 minutes to 7.6 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of June 20:
o Total: 3.91% (previous week: 3.93%)
o IMBs: 4.03% (previous week: 4.05%)
o Depositories: 4.14% (previous week: 4.16%)
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 firstname.lastname@example.org.
NOTE: MBA offices are closed on Monday, July 5, in observance of Independence Day. The next Forbearance and Call Volume Survey will be released on Tuesday, July 6, at 4:00 p.m. ET.