Share Of Mortgages In Forbearance Decreases To 2.96%

October 1, 2021 PROGRESS In Lending MBA, mortgage forbearance

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 4 basis points from 3.00% of servicers’ portfolio volume in the prior week to 2.96% as of September 19, 2021. According to MBA’s estimate, 1.5 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 1.44%. Ginnie Mae loans in forbearance increased 3 basis points to 3.42%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 4 basis points to 6.91%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 1 basis point relative to the prior week to 3.24%, and the percentage of loans in forbearance for depository servicers decreased 4 basis points to 3.06%.

“The share of loans in forbearance continued to decrease last week, dropping below 3 percent for the first time since March 2020,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “However, there was a slight increase in the forbearance share for Ginnie Mae loans, and this increase was seen for both depository and IMB servicers. New forbearance requests and re-entries continue to run at a higher rate for Ginnie Mae loans as well as for portfolio and PLS loans, which include many delinquent FHA, VA, and USDA loans that have been bought out of Ginnie Mae pools.”

Key findings of MBA’s Forbearance and Call Volume Survey – September 13 to September 19, 2021

Total loans in forbearance decreased by 4 basis points relative to the prior week: from 3.00% to 2.96%.
By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 3.39% to 3.42%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.47% to 1.44%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 6.95% to 6.91%.
By stage, 12.0% of total loans in forbearance are in the initial forbearance plan stage, while 79.3% are in a forbearance extension. The remaining 8.7% are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.05%.
Of the cumulative forbearance exits for the period from June 1, 2020, through September 19, 2021, at the time of forbearance exit:
28.7% resulted in a loan deferral/partial claim.
21.8% represented borrowers who continued to make their monthly payments during their forbearance period.
16.3% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
12.7% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
11.8% resulted in a loan modification or trial loan modification.
7.4% resulted in loans paid off through either a refinance or by selling the home.
The remaining 1.4% 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 relative to the prior week: from 6.3% to 7.9%.
Average speed to answer decreased from 1.8 minutes to 1.7 minutes.
Abandonment rates decreased from 4.8% to 4.5%.
Average call length decreased from 8.3 minutes to 8.2 minutes.
Loans in forbearance as a share of servicing portfolio volume (#) as of September 19, 2021:
Total: 2.96% (previous week: 3.00%)
IMBs: 3.24% (previous week: 3.25%)
Depositories: 3.06% (previous week: 3.10%)