MBA Reports Share of Mortgage Loans in Forbearance Holds Steady at 0.22% in February
(Illustration courtesy of MBA)
The Mortgage Bankers Association’s monthly Loan Monitoring Survey revealed the total number of loans now in forbearance remained unchanged at 0.22% as of Feb. 29, 2024.
According to MBA’s estimate, 110,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.1 million borrowers since March 2020.
In February 2024, the share of Fannie Mae and Freddie Mac loans in forbearance declined 1 basis point to 0.12%. Ginnie Mae loans in forbearance increased by 1 basis point to 0.40%, and the forbearance share for portfolio loans and private-label securities increased 1 basis point to 0.29%.
“The performance of servicing portfolios and loan workouts improved in February, as borrowers benefitted from tax refunds, the extra day in the month to submit their payments, and continued resilience in the job market,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Only around 110,000 loans nationwide remain in a forbearance plan, with little movement this month. The pandemic’s impact has waned, with only 16 percent of borrowers in forbearance because of COVID-19, compared to 72 percent for temporary personal hardships and 12 percent for natural disasters.”
Key Findings of MBA’s Loan Monitoring Survey – February 1 to February 29, 2024
Total loans in forbearance remined unchanged in February 2024 relative to January 2024 at 0.22%.
– By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior month: from 0.39% to 0.40%.
– The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior month: from 0.13% to 0.12%.
– The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior month: from 0.28% to 0.29%.
Loans in forbearance as a share of servicing portfolio volume (#) as of February 29, 2024:
– Total: 0.22% (previous month: 0.22%)
– Independent Mortgage Banks (IMBs): 0.25% (previous month: 0.26%)
– Depositories: 0.23% (previous month: 0.22%)
By reason, 71.9% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability; while 16.1% of borrowers are in forbearance because of COVID-19. Another 12.0% are in forbearance because of a natural disaster.
By stage, 56.2% of total loans in forbearance are in the initial forbearance plan stage, while 25.2% are in a forbearance extension. The remaining 18.6% are forbearance re-entries, including re-entries with extensions.
Of the cumulative forbearance exits for the period from July 1, 2020, through February 29, 2024, at the time of forbearance exit:
– 29.3% resulted in a loan deferral/partial claim.
– 17.6% represented borrowers who continued to make their monthly payments during their forbearance period.
– 18.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
– 16.0% resulted in a loan modification or trial loan modification.
– 10.7% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
– 6.4% resulted in loans paid off through either a refinance or by selling the home.
– The remaining 1.2% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume (#) increased to 95.73% (on a non-seasonally adjusted basis) in February 2024, up 6 basis points from 95.67% in January 2024 and down from 95.76% one year ago.
– The five states with the highest share of loans that were current as a percent of servicing portfolio: Idaho, Colorado, Washington, California, and Montana.
– The five states with the lowest share of loans that were current as a percent of servicing portfolio: Louisiana, Mississippi, Indiana, New York and Illinois.
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 were 75.68% in February 2024, up from 74.88% the prior month and down from 76.00% one year ago.
MBA’s monthly Loan Monitoring Survey covers the period from February 1 through February 29, 2024, and represents 65% of the first-mortgage servicing market (32.3 million loans). To subscribe to the full report, visit 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. Fourth-quarter 2023 results were released on Thursday, February 8, 2024.
The next publication of the Monthly Loan Monitoring Survey (LMS) will be released on Monday, April 22, 2024, at 4:00 p.m. ET.
