MBA: Share of Mortgage Loans in Forbearance Decreases to 4.19%
Mortgage loans in forbearance fell for the 12th consecutive week, the Mortgage Bankers Association reported Monday.
The MBA Forbearance and Call Volume Survey reported loans now in forbearance decreased by 3 basis points to 4.19% of servicers’ portfolio volume as of May 16 from 4.22% 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 3 basis points to 2.21%. Ginnie Mae loans in forbearance decreased 2 basis points to 5.59%, while the forbearance share for portfolio loans and private-label securities were unchanged at 8.26%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 4 basis points to 4.38%, while the percentage of loans in forbearance for depository servicers remained unchanged at 4.35%.
“The decline was smaller than the prior week due to a slower pace of forbearance exits,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Although the overall share is declining, there was another increase in forbearance re-entries. Currently, 5.3 percent of loans in forbearance are homeowners who had canceled forbearance but needed assistance again.”
Fratantoni noted while the job market is recovering, “the pace of recovery thus far is slower than we had forecasted. Continued job growth is needed to help more struggling homeowners get back on their feet.”
Key findings of MBA’s Forbearance and Call Volume Survey – May 10-16
• Total loans in forbearance decreased by 3 basis points relative to the prior week: from 4.22% to 4.19%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased from 5.61% to 5.59%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 2.24% to 2.21%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance remained unchanged at 8.26%.
• By stage, 11.8% of total loans in forbearance are in the initial forbearance plan stage, while 82.9% are in a forbearance extension. The remaining 5.3% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.04% to 0.05%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through May 16, 2021:
o 27.2% resulted in a loan deferral/partial claim.
o 24.8% 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 14.1% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 9.9% 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 8.0% to 8.4%.
o Average speed to answer decreased from 1.8 minutes to 1.7 minutes.
o Abandonment rates decreased from 6.1% to 5.2%.
o Average call length decreased from 7.9 minutes to 7.7 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of May 16:
o Total: 4.19% (previous week: 4.22%)
o IMBs: 4.38% (previous week: 4.42%)
o Depositories: 4.35% (previous week: 4.35%)
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.
NOTE: Due to the Memorial Day holiday, the next Forbearance and Call Volume Survey will be released on Tuesday, June 1.