Share of Mortgage Loans in Forbearance Decreases to 2.28%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans in forbearance decreased by 34 basis points to 2.28% as of October 10.

MBA estimates 1.1 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 16 basis points to 1.05%. Ginnie Mae loans in forbearance decreased 17 basis points to 2.77%, and the forbearance share for portfolio loans and private-label securities declined 108 basis points to 5.34%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 25 basis points relative to the prior week to 2.57%, and the percentage of loans in forbearance for depository servicers decreased 53 basis points to 2.16%.

“Forbearance exits continued at an even more robust pace, resulting in a 34 basis-point decline in the overall forbearance rate. The decline was apparent across all servicer types and investor types,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “There was a substantial drop of over 1 percentage point in the forbearance rate for portfolio and PLS loans, which includes loans held for investment purposes, loans serviced for private investors, and government loans that were bought out of Ginnie Mae pools for the purposes of modifying them and then re-securitizing them into Ginnie Mae pools.”

Fratantoni noted active forbearance plans are down to 1.1 million homeowners from a peak of 4.3 million homeowners in June 2020. “Positive employment and wage prospects, continued home-price appreciation and the availability of multiple loan workout options are factors that will smooth many homeowners’ transition out of forbearance,”” he said.

Key findings of MBA’s Forbearance and Call Volume Survey – October 4 – 10

• Total loans in forbearance decreased by 34 basis points relative to the prior week: from 2.62% to 2.28%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 2.94% to 2.77%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.21% to 1.05%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 6.42% to 5.34%.
  • By stage, 14.8% of total loans in forbearance are in the initial forbearance plan stage, while 75.5% are in a forbearance extension. The remaining 9.7% are forbearance re-entries.

• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.05% to 0.04%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through October 10, 2021, at the time of forbearance exit:
  • 28.9% resulted in a loan deferral/partial claim.
  • 20.8% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 16.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 12.9% resulted in a loan modification or trial loan modification.
  • 12.2% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 7.1% resulted in loans paid off through either a refinance or by selling the home.
  • The remaining 1.4% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
• Weekly servicer call center volume:
  • As a percent of servicing portfolio volume (#), calls decreased relative to the prior week: from 7.8% to 7.4%.
  • Average speed to answer increased from 2.5 minutes to 2.6 minutes.
  • Abandonment rates decreased from 6.2% to 6.0%.
  • Average call length decreased from 8.4 minutes to 8.3 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of October 10:
  • Total: 2.28% (previous week: 2.62%)
  • IMBs: 2.57% (previous week: 2.82%)
  • Depositories: 2.16% (previous week: 2.69%)

MBA’s latest Forbearance and Call Volume Survey represents 73% of the first-mortgage servicing market (36.7 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 fbsurvey@mba.org.