MBA: Share of Mortgage Loans in Forbearance Decreases Slightly to 0.38% in February
(Image courtesy of Brett Sayles/pexels.com)
The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 2 basis points from 0.40% of servicers’ portfolio volume in the prior month to 0.38% as of Feb. 28, 2025. According to MBA’s estimate, 190,000 homeowners are in forbearance plans. Mortgage servicers have provided approximately 8.6 million forbearances since March 2020.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.15% in February 2025. Ginnie Mae loans in forbearance decreased by 4 basis points to 0.84%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 3 basis points to 0.37%.
“Despite February’s monthly decline of loans in forbearance, the estimated number of forbearances and loan workouts increased compared to one year ago,” said MBA’s Vice President of Industry Analysis Marina Walsh, CMB. “The year-over-year gain may be attributed to increasing escrow payments for taxes and insurance, inflationary pressures, natural disasters, aging servicing portfolios, and a softening in the labor market. At the same time, the performance of loan workouts and overall servicing portfolios weakened compared to one year ago.
Key Findings of MBA’s Loan Monitoring Survey – Feb. 1 to Feb. 28, 2025
Total loans in forbearance decreased by 2 basis points in February 2025 relative to January 2025: from 0.40% to 0.38%.
• By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior month from 0.88% to 0.84%.
• The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior month from 0.17% to 0.15%.
• The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior month from 0.40% to 0.37%.
Loans in forbearance as a share of servicing portfolio volume (#) as of Feb. 28, 2025:
• Total: 0.38% (previous month: 0.40%; previous year: 0.22%)
• Independent Mortgage Banks (IMBs): 0.40% (previous month: 0.43%; previous year: 0.25%)
• Depositories: 0.38% (previous month: 0.38%; previous year: 0.23%)
By reason, 73.0% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability. Another 24.2% are in forbearance because of a natural disaster. The remaining 2.8% of borrowers are still in forbearance because of COVID-19.
By stage, 63.0% of total loans in forbearance are in the initial forbearance plan stage, while 18.2% are in a forbearance extension. The remaining 18.8% are forbearance re-entries, including re-entries with extensions.
The percentage of servicing volume with loan workouts (completed in 2020 or after) was 6.49% in February 2025, slightly down from 6.53% the previous month, and up from 6.04% one year ago.
Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume (#) was 95.16% in February 2025, down 19 basis points from 95.35% the prior month (on a non-seasonally adjusted basis), and down 57 basis points from 95.73% one year ago.
• The five states with the highest share of loans that were current as a percent of servicing portfolio: Idaho, Washington, Idaho, Alaska, Oregon and Colorado.
• 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 increased to 66.36% in February 2025, up 73 basis points from 65.63% the prior month, and down 932 basis points from 75.68% one year ago.
MBA’s monthly Loan Monitoring Survey covers the period from Feb. 1 through Feb. 28, 2025, and represents 61% of the first-mortgage servicing market (30.7 million loans). To subscribe to the full report, go to www.mba.org/loanmonitoring.
NOTES:
The rates reported in the LMS are not seasonally adjusted.
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. Fourth-quarter 2024 results were released on February 6, 2025.
The next publication of the Monthly Loan Monitoring Survey (LMS) will be released on Monday, April 21, 2025.
