MBA: Loans in Forbearance Fall 10th Straight Week
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 11 basis points to 4.36% of servicers’ portfolio volume as of May 2 from 4.47% the prior week–the 10th consecutive week of declines. MBA estimates 2.2 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 10 points to 2.32%. Ginnie Mae loans in forbearance decreased 20 basis points to 5.82%, while the forbearance share for portfolio loans and private-label securities remained unchanged at 8.55%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 12 basis points to 4.58%, while the percentage of loans in forbearance for depository servicers declined 15 basis points to 4.47%.
“The pace in the declining share of loans in forbearance quickened in the last week of April. This 10th week of decreases reflected a faster rate of exits and a steady, low level of new requests,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Homeowners who have exited forbearance and been able to take up their original payment again are performing at almost the same rate as the overall mortgage servicing portfolio.”
Fratantoni noted more than 47 percent of borrowers in forbearance extensions are past the 12-month mark as of the end of April. “Many homeowners continue to struggle and are falling farther behind on their obligations each month,” he said. “We expect that a robust economic and job market recovery over the next several months will help these families regain their jobs and their incomes.”
Key findings of MBA’s Forbearance and Call Volume Survey – April 26 – May 2
• Total loans in forbearance decreased by 11 basis points relative to the prior week: from 4.47% to 4.36%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 6.02% to 5.82%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.42% to 2.32%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance remained unchanged relative to the prior week at 8.55%.
• By stage, 12.5% of total loans in forbearance are in the initial forbearance plan stage, while 82.2% are in a forbearance extension. The remaining 5.3% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained unchanged relative to the prior week at 0.05%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through May 2:
o 26.9% resulted in a loan deferral/partial claim.
o 25.3% represented borrowers who continued to make their monthly payments during their forbearance period.
o 14.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 14.2% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 9.8% 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 1.6% resulted in repayment plans, short sales, deed-in-lieus or other
• Weekly servicer call center volume:
o As a percent of servicing portfolio volume (#), calls increased from the previous week from 6.4% to 7.8%.
o Average speed to answer increased from 1.2 minutes to 1.8 minutes.
o Abandonment rates increased from 2.8% to 4.4%.
o Average call length increased from 8.0 minutes to 8.1 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of May 2:
o Total: 4.36% (previous week: 4.47%)
o IMBs: 4.58% (previous week: 4.70%)
o Depositories: 4.47% (previous week: 4.62%)
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 email@example.com.