MBA: Share of Mortgage Loans in Forbearance Decreases to 5.67%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 16 basis points to 5.67% of servicers’ portfolio volume as of Nov. 1, from 5.83% the prior week. MBA now estimates 2.8 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 22nd week in a row to 3.49% – a 17-basis-point improvement. Ginnie Mae loans in forbearance decreased 18 basis points to 7.95% and the forbearance share for portfolio loans and private-label securities decreased by 12 basis points to 8.70%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 8 basis points to 6.19%, while the percentage of loans in forbearance for depository servicers decreased 26 basis points from the previous week to 5.60%.

“With declines in the share of loans in forbearance across the board, the data this week align well with the positive news from October’s jobs report, which showed a gain of more than 900,000 private sector jobs and a 1 percentage point decrease in the unemployment rate,” said MBA Senior Vice President and Chief Economist Mike Fratantoni. “A recovering job market, coupled with a strong housing market, is providing the support needed for many homeowners to get back on their feet.”

Fratantoni noted, however, data continue to show that servicers are still having difficulties reaching borrowers who have reached the six-month point of their forbearance period. “Servicers are required to get borrowers’ consent to extend forbearance beyond six months. Homeowners who continue to be impacted by hardships related to the pandemic should contact their servicer,” he said.

Key findings of MBA’s Forbearance and Call Volume Survey – October 26 to November 1

• Total loans in forbearance decreased by 16 basis points relative to the prior week: from 5.83% to 5.67%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 8.13% to 7.95%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.66% to 3.49%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.82% to 8.70%.
• By stage, 22.25% of total loans in forbearance are in the initial forbearance plan stage, while 75.99% are in a forbearance extension. The remaining 1.76% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained unchanged relative to the prior week at 0.10%.
• Of the cumulative forbearance exits for the period from June 1 through November 1:
  • 31.6% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 23.6% resulted in a loan deferral/partial claim.
  • 16.9% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 12.0% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 7.2% resulted in loans paid off through either a refinance or by selling the home.
  • 6.8% resulted in a loan modification.
  • The remaining 1.9% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
• Weekly servicer call center volume:
  • As a percent of servicing portfolio volume (#), calls increased from 6.7% to 8.1%.
  • Average speed to answer increased from 1.8 minutes to 2.3 minutes.
  • Abandonment rates increased from 5.1% to 6.0%.
  • Average call length remained unchanged relative to the prior week at 7.9 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of November 1:
  • Total: 5.67% (previous week: 5.83%)
  • IMBs: 6.19% (previous week: 6.27%)
  • Depositories: 5.60% (previous week: 5.86%)

The MBA Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (37.2 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 fbsurvey@mba.org.