Share of Mortgage Loans in Forbearance Falls to 4.22%
Loans in forbearance fell for the 11th consecutive week to 4.22% of servicers’ portfolio volume as of May 9, the Mortgage Bankers Association reported Monday.
The MBA Forbearance and Call Volume Survey reported loans now in forbearance decreased by 14 basis points from 4.36% of servicers’ portfolio volume in the prior week. MBA estimates 2.1 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased by 8 basis points to 2.24%. Ginnie Mae loans in forbearance decreased by 21 basis points to 5.61%, while the forbearance share for portfolio loans and private-label securities decreased by 29 basis points to 8.26%. The percentage of loans in forbearance for independent mortgage bank servicers decreased by 16 basis points to 4.42%, while the percentage of loans in forbearance for depository servicers declined by 12 basis points to 4.35%.
“The rate of new requests dropped to 4 basis points, which is the lowest level since last March,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Of those in forbearance extensions, more than half have been in forbearance for more than 12 months.”
Fratantoni noted the opening of the economy, as the successful vaccination effort continues, “should lead to further reductions in the forbearance share. However, many homeowners continue to struggle. Borrowers who are reaching the end of their forbearance term should reach out to their servicer to review their options.”
Key findings of MBA’s Forbearance and Call Volume Survey – May 3 – 9:
• Total loans in forbearance decreased by 14 basis points relative to the prior week: from 4.36% to 4.22%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased from 5.82% to 5.61%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 2.32% to 2.24%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased from 8.55% to 8.26%.
• By stage, 11.9% of total loans in forbearance are in the initial forbearance plan stage, while 83.0% are in a forbearance extension. The remaining 5.1% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased from 0.05% to 0.04%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through May 9:
o 27.1% resulted in a loan deferral/partial claim.
o 24.9% represented borrowers who continued to make their monthly payments during their forbearance period.
o 15.0% 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 7.4% 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 reasons.
• Weekly servicer call center volume:
o As a percent of servicing portfolio volume (#), calls increased from the previous week from 7.8% to 8.0%.
o Average speed to answer remained the same relative to the prior week at 1.8 minutes.
o Abandonment rates increased from 4.4% to 6.1%.
o Average call length decreased from 8.1 minutes to 7.9 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of May 9:
o Total: 4.22% (previous week: 4.36%)
o IMBs: 4.42% (previous week: 4.58%)
o Depositories: 4.35% (previous week: 4.47%)
The MBA 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.