Share of Mortgage Loans in Forbearance Down 9th Straight Week
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 2 basis points to 4.47% of servicers’ portfolio volume as of April 25 from 4.49% in the prior week, the ninth straight weekly decrease. MBA estimates 2.23 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 points to 2.42%. Ginnie Mae loans in forbearance decreased 7 basis points to 6.02%, while the forbearance share for portfolio loans and private-label securities increased by 13 basis points to 8.55%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 2 basis points to 4.70%, while the percentage of loans in forbearance for depository servicers also declined 2 basis points to 4.62%.
“The rate of exits has slowed the past two weeks, with this week’s exit rate reaching the lowest since February,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “The increase in the forbearance share for portfolio and PLS loans highlights both the ongoing buyouts of delinquent loans from Ginnie Mae pools as well as an increased forbearance share for other loans that are not federally backed.”
Fratantoni noted job market and housing market data remain strong. “We expect that further gains in
hiring will help to support many homeowners as they exit forbearance in the months ahead,” he said.
Key findings of MBA’s Forbearance and Call Volume Survey – April 19 – 25:
• Total loans in forbearance decreased by 2 basis points relative to the prior week: from 4.49% to 4.47%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 6.09% to 6.02%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.44% to 2.42%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.42% to 8.55%.
• By stage, 12.8% of total loans in forbearance are in the initial forbearance plan stage, while 82.3% are in a forbearance extension. The remaining 4.9% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.06% to 0.05%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through April 25:
o 27.0% resulted in a loan deferral/partial claim.
o 25.3% represented borrowers who continued to make their monthly payments during their forbearance period.
o 14.6% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 14.4% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 9.6% 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 reasons.
• Weekly servicer call center volume:
o As a percent of servicing portfolio volume (#), calls decreased from the previous week
from 8.5% to 6.4%.
o Average speed to answer remained flat relative to the prior week at 1.2 minutes.
o Abandonment rates decreased from 9.6% to 2.8%, a survey low.
o Average call length remained flat at 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of April 25:
o Total: 4.47% (previous week: 4.49%)
o IMBs: 4.70% (previous week: 4.72%)
o Depositories: 4.62% (previous week: 4.64%)
MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (37 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.