MBA: Share of Mortgage Loans in Forbearance Increases to 0.31% in August

The Mortgage Bankers Association’s monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance increased to 0.31% as of August 31, 2024.

According to MBA’s estimate, 155,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.2 million borrowers since March 2020.

The share of Fannie Mae and Freddie Mac loans in forbearance increased 1 basis point to 0.13% in August 2024. Ginnie Mae loans in forbearance increased by 10 basis points to 0.66%, and the forbearance share for portfolio loans and private-label securities (PLS) increased 2 basis points to 0.35%.

“For the third consecutive month, the percentage of loans in forbearance increased across all loan types,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “By investor type, Ginnie Mae loans in forbearance have increased the most – up 27 basis points since May 2024.”

Added Walsh, “Forbearance levels are much lower than they were during the first two years of the pandemic.  However, a weakening in the performance of servicing portfolios, and an increase in forbearance requests, is likely given the softening observed in the labor market.”

Key Findings of MBA’s Loan Monitoring Survey – August 1 to August 31, 2024

Total loans in forbearance increased by 4 basis points in August 2024 relative to July 2024: from 0.27% to 0.31%.

• By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior month from 0.56% to 0.66%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior month from 0.12% to 0.13%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior month from 0.33% to 0.35%.

Loans in forbearance as a share of servicing portfolio volume (#) as of August 31, 2024:

• Total: 0.31% (previous month: 0.27%)
  • Independent Mortgage Banks (IMBs): 0.35% (previous month: 0.30%)
  • Depositories: 0.29% (previous month: 0.27%)

By reason, 68.4% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability. Another 25.9% are in forbearance because of a natural disaster. Only 5.7% of borrowers are still in forbearance because of COVID-19. 

By stage, 63.1% of total loans in forbearance are in the initial forbearance plan stage, while 20.7% are in a forbearance extension. The remaining 16.2% 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 (#) remained the same as the previous month at 95.76% (on a non-seasonally adjusted basis) in August 2024, but down 33 basis points from one year ago.

• The five states with the highest share of loans that were current as a percent of servicing portfolio: Idaho, Washington, Colorado, Oregon, and California.
  • The five states with the lowest share of loans that were current as a percent of servicing portfolio: Louisiana, Mississippi, Indiana, West Virginia, and Alabama.

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 73.00% in August 2024, down 51 basis points from 73.51% the prior month and down 44 basis points from one year ago. 

MBA’s monthly Loan Monitoring Survey covers the period from August 1 through August 31, 2024, and represents 64% of the first-mortgage servicing market (31.9 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. Second-quarter 2024 results were released on Thursday, August 15, 2024.

The next publication of the Monthly Loan Monitoring Survey will be released on Monday, October 21, 2024.