Share of Mortgage Loans in Forbearance Increases to 0.34% in September
The Mortgage Bankers Association’s monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance increased to 0.34% as of September 30, 2024. According to MBA’s estimate, 170,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.3 million borrowers since March 2020.
The share of Fannie Mae and Freddie Mac loans in forbearance remained the same as the previous month at 0.13% in September 2024. Ginnie Mae loans in forbearance increased by 10 basis points to 0.76%, and the forbearance share for portfolio loans and private-label securities (PLS) increased 2 basis points to 0.37%.
“The percentage of loans in forbearance increased for the fourth consecutive month,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Since May 2024, Ginnie Mae loans in forbearance increased by almost 40 basis points, compared to six basis points for portfolio and PLS loans and three basis points for Fannie and Freddie loans.”
Added Walsh, “We are seeing some weakening in loan performance, particularly among government products. Overall government loan performance reached a new low for the year in September. In addition, the share of government post-forbearance workouts that are current dropped considerably over the past four months. These trends indicate that some homeowners are exhibiting signs of distress – whether because of economic hardships, natural disasters, or other reasons.”
Key Findings of MBA’s Loan Monitoring Survey – September 1 to September 30, 2024
Total loans in forbearance increased by 3 basis points in September 2024 relative to August 2024: from 0.31% to 0.34%.
By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior month from 0.66% to 0.76%.
The share of Fannie Mae and Freddie Mac loans in forbearance remained unchanged relative to the prior month at 0.13%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior month from 0.35% to 0.37%.
Loans in forbearance as a share of servicing portfolio volume (#) as of September 30, 2024:
Total: 0.34% (previous month: 0.31%)
Independent Mortgage Banks (IMBs): 0.39% (previous month: 0.35%)
Depositories: 0.30% (previous month: 0.29%)
By reason, 70.4% 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 3.7% of borrowers are still in forbearance because of COVID-19.
By stage, 65.5% of total loans in forbearance are in the initial forbearance plan stage, while 20.5% are in a forbearance extension. The remaining 14.0% 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 (#) reached 95.59% in September 2024, down 17 basis points from 95.76% the prior month (on a non-seasonally adjusted basis), and down 23 basis points from one year ago.
The five states with the highest share of loans that were current as a percent of servicing portfolio: Washington, Idaho, 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 68.76% in September 2024, down 423 basis points from 73.00% the prior month and down 344 basis points from one year ago.
MBA’s monthly Loan Monitoring Survey covers the period from September 1 through September 30, 2024, and represents 64% of the first-mortgage servicing market (32 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. Third-quarter 2024 results will be released on Thursday, November 7, 2024.
