Share of Mortgage Loans in Forbearance Drops to 3.08%
Forbearance exits saw their fastest pace since March, the Mortgage Bankers Association reported Monday afternoon in its weekly Forbearance and Call Volume Survey.
The Survey reported loans now in forbearance decreased by 15 basis points to 3.08% of servicers’ portfolio volume as of Sept. 5 from 3.23% the previous week. MBA estimates 1.5 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased by 11 basis points to 1.52%. Ginnie Mae loans in forbearance decreased by 24 basis points to 3.39%, while the forbearance share for portfolio loans and private-label securities decreased by 25 basis points to 7.27%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 16 basis points to 3.33%, while the percentage of loans in forbearance for depository servicers decreased 18 basis points to 3.15%.
“The fast pace of exits outweighed the slight increase in new forbearance requests and re-entries,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Servicer call volume jumped last week as summer came to an end and many borrowers reached the end of their forbearance terms. We anticipate a similarly fast pace of exits in the weeks ahead, which should lead to increased call volume and a further decline in the forbearance share.”
Key findings of MBA’s Forbearance and Call Volume Survey – August 30 – September 5
• Total loans in forbearance decreased by 15 basis point from 3.23% to 3.08%.
o By investor type, the share of Ginnie Mae loans in forbearance decreased from 3.63% to 3.39%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 1.63% to 1.52%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased from 7.52% to 7.27%.
• By stage, 10.7% of total loans in forbearance are in the initial forbearance plan stage, while 81.1% are in a forbearance extension. The remaining 8.2% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased from 0.04% to 0.05%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through September 5, 2021, at the time of forbearance exit:
o 28.3% resulted in a loan deferral/partial claim.
o 22.2% represented borrowers who continued to make their monthly payments during their forbearance period.
o 16.3% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 12.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 11.5% 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 increased from 5.8% to 7.7%.
o Average speed to answer increased from 1.0 minutes to 1.6 minutes.
o Abandonment rates increased from 3.3% to 4.0%.
o Average call length increased from 8.1 minutes to 8.2 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of September 5:
o Total: 3.08% (previous week: 3.23%)
o IMBs: 3.33% (previous week: 3.49%)
o Depositories: 3.15% (previous week: 3.33%)
MBA’s latest Forbearance and Call Volume Survey represents 73% of the first-mortgage servicing market (36.5 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.