MBA: Share of Mortgage Loans in Forbearance Decreases to 5.20%

The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey reported loans now in forbearance decreased by 3 basis points to 5.20% of servicers’ portfolio volume as of February 28 from 5.23% the previous week. MBA estimates 2.6 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.94% – a 3-basis-point improvement. Ginnie Mae loans in forbearance decreased 7 basis points to 7.28%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 2 basis points to 9.05%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 6 basis points to 5.51%, and the percentage of loans in forbearance for depository servicers decreased 1 basis point to 5.28%.

“The pace of forbearance exits increased; this continues the trend reported in prior months,” said MBA Chief Economist Mike Fratantoni. “Of those homeowners in forbearance, more than 12 percent were current at the end of February, down somewhat from the almost 14 percent at the end of January. The improving economy, the soon-to-be passed stimulus package and the many homeowners in forbearance reaching the 12-month mark of their plan could all influence the overall forbearance share in the coming months.”

Fratantoni noted job growth picked up sharply in February and the unemployment rate decreased, but there remains nearly 10 million people unemployed, with 4.1 million among the long-term unemployed – up 125,000 from January. “Passage of the American Rescue Plan provides needed support for homeowners who are continuing to struggle during these challenging times,” he said.

Key findings of MBA’s Forbearance and Call Volume Survey – February 22 – 28

• Total loans in forbearance decreased by 3 basis points relative to the prior week: from 5.23% to 5.20%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.35% to 7.28%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.97% to 2.94%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 9.03% to 9.05%.
• By stage, 14.6% of total loans in forbearance are in the initial forbearance plan stage, while 82.8% are in a forbearance extension. The remaining 2.6% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.07%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through February 28:
  • 27.7% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 25.8% resulted in a loan deferral/partial claim.
  • 15.2% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 13.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 8.0% resulted in a loan modification or trial loan modification.
  • 7.6% resulted in loans paid off through either a refinance or by selling the home.
  • The remaining 1.8% 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 the previous week from 7.9% to 8.7%.
  • Average speed to answer decreased from 3.0 minutes to 2.6 minutes.
  • Abandonment rates decreased from 7.6% to 6.1%.
  • Average call length decreased from 8.2 minutes to 8.1 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of February 28:
  • Total: 5.20% (previous week: 5.23%)
  • IMBs: 5.51% (previous week: 5.57%)
  • Depositories: 5.28% (previous week: 5.29%)

MBA’s latest Forbearance and Call Volume Survey represents 74% of the first-mortgage servicing market (37.0 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.