Share of Mortgage Loans in Forbearance Falls to 3.00%
Mortgage loans in forbearance fell to yet another post-pandemic low and threatened to fall under 3 percent for the first time in more than a year and a half, the Mortgage Bankers Association reported on Monday.
The MBA Forbearance and Call Volume Survey reported loans now in forbearance decreased by 8 basis points to 3.00% of servicers’ portfolio volume as of Sept. 12 from 3.08% the prior week. MBA estimates 1.5 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased by 5 basis points to 1.47%. Ginnie Mae loans in forbearance were unchanged at 3.39%, while the forbearance share for portfolio loans and private-label securities decreased by 32 basis points to 6.95%. The percentage of loans in forbearance for independent mortgage bank servicers decreased by 8 basis points to 3.25%, while the percentage of loans in forbearance for depository servicers
decreased 5 basis points to 3.10%.
“Forbearance exits remained elevated and new forbearance requests and re-entries were unchanged,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “20% of loans in forbearance are either new forbearance
requests or re-entries. At this point, borrowers in forbearance extensions are exiting at a faster rate as they near – or reach – the expiration of their maximum forbearance term.”
Key findings of MBA’s Forbearance and Call Volume Survey – September 6 – 12
• Total loans in forbearance decreased by 8 basis points from 3.08% to 3.00%.
o By investor type, the share of Ginnie Mae loans in forbearance were unchanged at 3.39%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 1.52% to 1.47%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased from 7.27% to 6.95%.
• By stage, 11.3% of total loans in forbearance are in the initial forbearance plan stage, while 80.2% are in a forbearance extension. The remaining 8.5% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) was unchanged at 0.05%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through September 12, 2021, at the time of forbearance exit:
o 28.6% resulted in a loan deferral/partial claim.
o 21.9% represented borrowers who continued to make their monthly payments during their forbearance period.
o 16.4% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
o 12.7% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
o 11.6% 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 7.7% to 6.3%.
o Average speed to answer increased from 1.6 minutes to 1.8 minutes.
o Abandonment rates increased from 4.0% to 4.8%.
o Average call length increased from 8.2 minutes to 8.3 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of September 12:
o Total: 3.00% (previous week: 3.08%)
o IMBs: 3.25% (previous week: 3.33%)
o Depositories: 3.10% (previous week: 3.15%)
The MBA 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.