Share Of Mortgages In Forbearance Declines Slightly

August 25, 2020 PROGRESS In Lending

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 1 basis point from 7.21% of servicers’ portfolio volume in the prior week to 7.20% as of August 16, 2020. According to MBA’s estimate, 3.6 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance also dropped by only 1 basis point to 4.93%. Ginnie Mae loans in forbearance were flat at 9.54%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 3 basis points to 10.37%. The percentage of loans in forbearance for depository servicers dropped 1 basis point to 7.48%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers increased 1 basis point to 7.43%.

“The share of loans in forbearance declined for the tenth week in a row, but the rate of improvement has slowed markedly. The extremely high rate of initial claims for unemployment insurance and high level of unemployment remain a concern, and are indications of the challenges many households are facing,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “While new forbearance requests remain low, particularly for Fannie Mae and Freddie Mac loans, the pace of exits from forbearance has declined for two straight weeks.”

Key findings of MBA’s Forbearance and Call Volume Survey – August 10 to August 16, 2020

Total loans in forbearance decreased by 1 basis point relative to the prior week: from 7.21% to 7.20%.
By investor type, the share of Ginnie Mae loans in forbearance remained the same at 9.54%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.94% to 4.93%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 10.34% to 10.37%.
By stage, 37.91% of total loans in forbearance are in the initial forbearance plan stage, while 61.34% are in a forbearance extension. The remaining 0.75% are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.11% to 0.10%.
Weekly servicer call center volume:
As a percent of servicing portfolio volume (#), calls increased from 7.9% to 8.7%.
Average speed to answer increased from 2.2 minutes to 2.8 minutes.
Abandonment rates increased from 5.6% to 5.7%.
Average call length decreased from 7.5 minutes to 7.2 minutes.
Loans in forbearance as a share of servicing portfolio volume (#) as of August 16, 2020:
Total: 7.20% (previous week: 7.21%)
IMBs: 7.43% (previous week: 7.42%)
Depositories: 7.48% (previous week: 7.49%)