MBA: Share of Loans in Forbearance Falls to 5.05%
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance fell by 9 percent to 5.05% of mortgage servicers’ portfolio volume as of March 14 from 5.14% the week earlier–the lowest level in nearly a year. MBA estimates 2.5 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.83% – a 5-basis-point improvement. Ginnie Mae loans in forbearance decreased 13 basis points to 7.03%, while the forbearance share for portfolio loans and private-label securities decreased by 14 basis points to 8.91%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 8 basis points to 5.37%, while the percentage of loans in forbearance for depository servicers declined 4 basis points to 5.15%.
“Combined with a steady pace of exits, this drop in new requests resulted in a larger decline in the share of loans in forbearance across all investor categories,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “More than 11 percent of borrowers in forbearance have now exceeded the 12-month mark. We anticipate that servicers will be busy over the next month, with many homeowners opting for the extension for up to 18 months recently made available for federally backed loans.”
Fratantoni noted the pace of economic activity is picking up as the vaccine rollout continues. “We
expect that a stronger job market will help many successfully exit forbearance in the months ahead,” he said.
Key findings of MBA’s Forbearance and Call Volume Survey – March 8 – 14
• Total loans in forbearance decreased by 9 basis points relative to the prior week: from 5.14% to 5.05%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.16% to 7.03%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.88% to 2.83%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: 9.05% to 8.91%.
• By stage, 13.9% of total loans in forbearance are in the initial forbearance plan stage, while 83.5% are in a forbearance extension. The remaining 2.6% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.07% to 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 14:
o 27.1% represented borrowers who continued to make their monthly payments during their forbearance period.
o 26.2% resulted in a loan deferral/partial claim.
o 14.9% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 14.2% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 8.2% 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 10.0% to 9.2%.
o Average speed to answer decreased from 4.1 minutes to 2.5 minutes.
o Abandonment rates decreased from 10.1% to 6.1%.
o Average call length decreased from 8.5 minutes to 8.1 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of March 14:
o Total: 5.05% (previous week: 5.14%)
o IMBs: 5.37% (previous week: 5.45%)
o Depositories: 5.15% (previous week: 5.19%)
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 email@example.com.