Marketpulse: Share Of Mortgages In Forbearance Decreases To 3.91%

June 30, 2021 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 2 basis points from 3.93% of servicers’ portfolio volume in the prior week to 3.91% as of June 20, 2021. According to MBA’s estimate, 2 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 2.02%. Ginnie Mae loans in forbearance decreased 2 basis points to 5.13%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased 1 basis point to 7.97%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 2 basis points to 4.03%, and the percentage of loans in forbearance for depository servicers declined 2 basis points to 4.14%.

“The share of loans in forbearance declined for the 17th straight week, with small declines across almost every loan category,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The rate of forbearance exits slowed – as has been typical in mid-month reports – but the pace of new forbearance requests remained at a very low level of 4 basis points.”

Added Fratantoni, “The steady improvement in the aggregate forbearance numbers is heartening, as it is evidence that improving economic conditions are allowing more homeowners to get back on their feet. However, we continue to closely monitor the number of forbearance re-entries, reflecting borrowers who exited forbearance but had to re-enter due to hardships. These re-entries accounted for 6.2 percent of loans in forbearance this week.”

Key findings of MBA’s Forbearance and Call Volume Survey – June 14 to June 20, 2021

Total loans in forbearance decreased by 2 basis points relative to the prior week: from 3.93% to 3.91%.
By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 5.15% to 5.13%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.05% to 2.02%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 7.98% to 7.97%.
By stage, 10.7% of total loans in forbearance are in the initial forbearance plan stage, while 83.1% are in a forbearance extension. The remaining 6.2% are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.04%.
Of the cumulative forbearance exits for the period from June 1, 2020, through June 20, 2021:
27.8% resulted in a loan deferral/partial claim.
23.9% represented borrowers who continued to make their monthly payments during their forbearance period.
15.2% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
13.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
10.3% resulted in a loan modification or trial loan modification.
7.5% resulted in loans paid off through either a refinance or by selling the home.
The remaining 1.5% 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 7.0% to 7.2%.
Average speed to answer increased from 1.3 minutes to 1.5 minutes.
Abandonment rates increased from 4.2% to 4.9%.
Average call length decreased from 7.8 minutes to 7.6 minutes.
Loans in forbearance as a share of servicing portfolio volume (#) as of June 20, 2021:
Total: 3.91% (previous week: 3.93%)
IMBs: 4.03% (previous week: 4.05%)
Depositories: 4.14% (previous week: 4.16%)