MBA: Share of Loans in Forbearance Hit New Pandemic Low
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 9 basis points to 4.96% of servicers’ portfolio volume as of March 21 from 5.05% the week before. This marks the fourth consecutive week of decreases. MBA estimates 2.5 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.77% – a 6-basis-point improvement. Ginnie Mae loans in forbearance decreased 20 basis points to 6.83%, while the forbearance share for portfolio loans and private-label securities decreased by 1 basis point to 8.90%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 14 basis points to 5.23%, while the percentage of loans in forbearance for depository servicers declined 5 basis points to 5.10%.
“New forbearance requests remained at their lowest level since last March, and the pace of exits increased,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist.
“More than 17 percent of borrowers in forbearance extensions have now exceeded the 12-month mark.” Fratantoni noted. “Many homeowners need this support, even as there are increasing signs that the pace of economic activity is picking up as the vaccine rollout continues. Those who have an ongoing hardship due to the pandemic and want to extend their forbearance beyond the 12-month point need to contact their servicer. Servicers cannot automatically extend forbearance terms without the borrower’s consent.”
Key findings of MBA’s Forbearance and Call Volume Survey – March 15 – 21,
• Total loans in forbearance decreased by 9 basis points relative to the prior week: from 5.05% to 4.96%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.03% to 6.83%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.83% to 2.77%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: 8.91% to 8.90%.
• By stage, 13.8% of total loans in forbearance are in the initial forbearance plan stage, while 83.4% are in a forbearance extension. The remaining 2.8% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained flat relative to the prior week at 0.05%, the lowest level since the week ending March 15, 2020.
• Of the cumulative forbearance exits for the period from June 1, 2020, through March 21, 2021:
o 26.9% represented borrowers who continued to make their monthly payments during their forbearance period.
o 26.5% resulted in a loan deferral/partial claim.
o 14.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 14.1% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 8.3% resulted in a loan modification or trial loan modification.
o 7.6% resulted in loans paid off through either a refinance or by selling the home.
o The remaining 1.8% 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 decreased from the previous week from 9.2% to 8.9%.
o Average speed to answer increased from 2.5 minutes to 2.7 minutes.
o Abandonment rates increased from 6.1% to 7.0%.
o Average call length increased from 8.1 minutes to 8.3 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of March 21:
o Total: 4.96% (previous week: 5.05%)
o IMBs: 5.23% (previous week: 5.37%)
o Depositories: 5.10% (previous week: 5.15%)
MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (37.1 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 email@example.com.