MBA Reports Share of Mortgage Loans in Forbearance Increases to 0.27% in July
(Image courtesy of MBA; Breakout image courtesy of Oleksandr P/pexels.com)
The Mortgage Bankers Association’s monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance increased to 0.27% as of July 31, 2024. According to MBA’s estimate, 135,000 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 0.12% in July 2024. Ginnie Mae loans in forbearance increased by 12 basis points to 0.56%, and the forbearance share for portfolio loans and private-label securities (PLS) increased 2 basis points to 0.33%.
“July saw an increase of approximately 20,000 more U.S. homeowners in forbearance compared to the previous month,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Most of this change can be attributed to recent natural disasters, which accounted for 27 percent of all loans in forbearance last month compared to 16 percent in June.”
Added Walsh, “Despite the increase in forbearances, the overall performance of servicing portfolios and loan workouts improved over June’s results, albeit still weaker than May and from one year ago.”
Key Findings of MBA’s Loan Monitoring Survey – July 1 to July 31, 2024
Total loans in forbearance increased by 4 basis points in July 2024 relative to June 2024: from 0.23% to 0.27%.
• By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior month from 0.44% to 0.56%.
• The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior month from 0.11% to 0.12%.
• The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior month from 0.31% to 0.33%.
Loans in forbearance as a share of servicing portfolio volume (#) as of July 31, 2024:
• Total: 0.27% (previous month: 0.23%)
• Independent Mortgage Banks (IMBs): 0.30% (previous month: 0.24%)
• Depositories: 0.27% (previous month: 0.26%)
By reason, 66.8% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability. Another 26.7% are in forbearance because of a natural disaster. Only 6.6% of borrowers are still in forbearance because of COVID-19.
By stage, 62.7% of total loans in forbearance are in the initial forbearance plan stage, while 20.1% are in a forbearance extension. The remaining 17.2% 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 (#) increased to 95.76% (on a non-seasonally adjusted basis) in July 2024, up 11 basis points from 95.65% in June 2024, but down 38 basis points from May.
• The five states with the highest share of loans that were current as a percent of servicing portfolio: Washington, Idaho, Colorado, California, and Oregon.
• The five states with the lowest share of loans that were current as a percent of servicing portfolio: Louisiana, Mississippi, Indiana, Alabama, and West Virginia.
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 increased to 73.51% in July 2024, up 24 basis points from 73.27% the prior month, but down 227 basis points from May.
MBA’s monthly Loan Monitoring Survey covers the period from July 1 through July 31, 2024, and represents 64% of the first-mortgage servicing market (31.8 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, Aug. 15, 2024.
The next publication of the Monthly Loan Monitoring Survey (LMS) will be released on Monday, Sept. 23, 2024.
