MBA: Share of Mortgage Loans in Forbearance Decreases Slightly to 0.21% in May
(Image courtesy of MBA)
The Mortgage Bankers Association’s monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance declined slightly to 0.21% as of May 31, 2024. According to MBA’s estimate, 105,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.2 million borrowers since March 2020.
In May 2024, the share of Fannie Mae and Freddie Mac loans in forbearance declined 1 basis point to 0.10%. Ginnie Mae loans in forbearance remained the same relative to the previous month at 0.39%, and the forbearance share for portfolio loans and private-label securities (PLS) also stayed flat at 0.31%.
“The performance of servicing portfolios in May was solid, with about 96% of borrowers making their mortgage payments on time,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “There was a slight decline in the performance of post-forbearance loan workouts, but the results were relatively strong with 75% of homeowners making their payments in accordance with the workout terms.”
Key Findings of MBA’s Loan Monitoring Survey – May 1 to May 31, 2024
Total loans in forbearance decreased by 1 basis point in May 2024 relative to April 2024: from 0.22% to 0.21%.
• By investor type, the share of Ginnie Mae loans in forbearance remained the same relative to the prior month at 0.39%.
• The share of Fannie Mae and Freddie Mac loans in forbearance declined relative to the prior month from 0.11% to 0.10%.
• The share of other loans (e.g., portfolio and PLS loans) in forbearance remained the same relative to the prior month at 0.31%.
Loans in forbearance as a share of servicing portfolio volume (#) as of May 31, 2024.
• Total: 0.21% (previous month: 0.22%)
• Independent Mortgage Banks (IMBs): 0.22% (previous month: 0.23%)
• Depositories: 0.25% (previous month: 0.25%)
By reason, 78.0% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability. Another 12.6% are in forbearance because of a natural disaster. Only 9.4% of borrowers are still in forbearance because of COVID-19.
By stage, 57.2% of total loans in forbearance are in the initial forbearance plan stage, while 22.5% are in a forbearance extension. The remaining 20.3% are forbearance re-entries, including re-entries with extensions.
Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume (#) increased to 96.14% (on a non-seasonally adjusted basis) in May 2024, up 5 basis points from 96.09% in April 2024.
• The five states with the highest share of loans that were current as a percent of servicing portfolio: Washington, Colorado, Idaho, Oregon, and California.
• The five states with the lowest share of loans that were current as a percent of servicing portfolio: Louisiana, Mississippi, Indiana, Alabama, and New York.
Total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/partial claims, loan modifications) that were current as a percent of total completed workouts decreased to 75.78% in May 2024, down 8 basis points from 75.86% the prior month.
MBA’s monthly Loan Monitoring Survey covers the period from May 1 through May 31, 2024, and represents 63% of the first-mortgage servicing market (31.7 million loans). To subscribe to the full report, go to www.mba.org/loanmonitoring.
NOTES: For more detailed information on performance metrics, including seasonally adjusted delinquency rates by stage (30 days, 60 days, 90+ days), please refer to MBA’s Quarterly National Delinquency Survey at www.mba.org/nds. First-quarter 2024 results were released on Thursday, May 16, 2024.
The next publication of the Monthly Loan Monitoring Survey (LMS) will be released on Monday, July 22, 2024, at 4:00 p.m. ET.
