Share of Mortgage Loans in Forbearance Decreases to 2.89%
Loans in forbearance continued their downward trend, the Mortgage Bankers Association reported Monday, and the number of homeowners in forbearance plans fell below 1.5 million.
The MBA Forbearance and Call Volume Survey reported loans now in forbearance decreased by 7 basis points to 2.89% of servicers’ portfolio volume as of Sept. 26 from 2.89% the prior week. MBA estimates 1.4 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased by 6 basis points to 1.38%. Ginnie Mae loans in forbearance decreased by 7 basis points to 3.35%, while the forbearance share for portfolio loans and private-label securities decreased by 14 basis points to 6.77%. The percentage of loans in forbearance for independent mortgage bank servicers decreased by 5 basis points to 3.19%, while the percentage of loans in forbearance for depository servicers decreased by 13 basis points to 2.93%.
“Exits increased and new requests and re-entries declined,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “While 1.4 million homeowners remained in forbearance as of September 26, this number is expected to drop sharply over the next few weeks as many are reaching the 18-month expiration point of their forbearance terms. Most borrowers exiting forbearance through a workout are opting for a deferral plan, which allows them to resume their original payment, while moving the forborne amount to the end of the loan.”
Fratantoni added although call volume dropped in the last week of September, “we expect that servicers will be very busy through October.”
Key findings of MBA’s Forbearance and Call Volume Survey – September 20 – 26
• Total loans in forbearance decreased by 7 basis points from 2.96% to 2.89%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased from 3.42% to 3.35%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 1.44% to 1.38%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased from 6.91% to 6.77%.
• By stage, 12.4% of total loans in forbearance are in the initial forbearance plan stage, while 78.7% are in a forbearance extension. The remaining 8.9% 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 September 26, 2021, at the time of forbearance exit:
o 28.9% resulted in a loan deferral/partial claim.
o 21.7% represented borrowers who continued to make their monthly payments during their forbearance period.
o 16.1% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 12.5% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 12.0% 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 1.4% 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 7.9% to 5.9%.
o Average speed to answer decreased from 1.7 minutes to 1.5 minutes.
o Abandonment rates decreased from 4.5% to 4.2%.
o Average call length remained the same relative to the prior week at 8.2 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of September 26:
o Total: 2.89% (previous week: 2.96%)
o IMBs: 3.19% (previous week: 3.24%)
o Depositories: 2.93% (previous week: 3.06%)
MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (36.8 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 firstname.lastname@example.org.