Share of Mortgage Loans In Forbearance Declines To 6.93%

Sep 30, 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 6 basis points from 6.93% of servicers’ portfolio volume in the prior week to 6.87% as of September 20, 2020. According to MBA’s estimate, 3.4 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 16th week in a row to 4.46% – a 9-basis-point improvement. Ginnie Mae loans in forbearance remained flat compared to the previous week at 9.15%, and the forbearance share for portfolio loans and private-label securities (PLS) also remained flat, at 10.52%. The percentage of loans in forbearance for depository servicers decreased 7 basis points to 7.11%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 3 basis points to 7.23%.

“The share of loans in forbearance continues to decline and is now at a level not seen since mid-April. Many homeowners with GSE loans are exiting forbearance into a deferral plan and resuming their original mortgage payment, but waiting to pay the forborne amount until the end of the loan,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.

“However, the overall picture is still somewhat of a mixed bag. The recent uptick in forbearance requests, particularly for those with FHA or VA loans, is leaving the Ginnie Mae share elevated, as the pace of new requests meets or exceeds the pace of exits.”

Added Fratantoni, “The continued churn in the job market is likely keeping many homeowners who have been in forbearance reluctant to exit, given the level of economic uncertainty.”

Key findings of MBA’s Forbearance and Call Volume Survey – September 14 to September 20, 2020

Total loans in forbearance decreased by 6 basis points relative to the prior week: from 6.93% to 6.87%.
By investor type, the share of Ginnie Mae loans in forbearance remained flat relative to the prior week at 9.15%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.55% to 4.46%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance remained flat relative to the prior week at 10.52%.
By stage, 30.26% of total loans in forbearance are in the initial forbearance plan stage, while 68.37% are in a forbearance extension. The remaining 1.37% are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.10% to 0.11%.
Weekly servicer call center volume:
As a percent of servicing portfolio volume (#), calls increased from 6.9% to 8.3%.
Average speed to answer decreased from 3.5 minutes to 3.0 minutes.
Abandonment rates decreased from 7.0% to 6.9%.
Average call length remained flat relative to the prior week at 7.8 minutes.
Loans in forbearance as a share of servicing portfolio volume (#) as of September 20, 2020:
Total: 6.87% (previous week: 6.93%)
IMBs: 7.23% (previous week: 7.26%)
Depositories: 7.11% (previous week: 7.18%)
MBA’s latest Forbearance and Call Volume Survey covers the period from September 14 through September 20, 2020, and represents 74% of the first-mortgage servicing market (37.1 million loans).