Share Of Mortgages In Forbearance Decreases To 4.04%

June 14, 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 12 basis points from 4.16% of servicers’ portfolio volume in the prior week to 4.04% as of June 6, 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 9 basis points to 2.09%. Ginnie Mae loans in forbearance decreased 32 basis points to 5.22%, while the forbearance share for portfolio loans and private-label securities (PLS) increased 2 basis points to 8.33%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 13 basis points to 4.21%, and the percentage of loans in forbearance for depository servicers decreased 14 basis points to 4.19%.

“MBA estimates that 2 million homeowners remain in forbearance as of June 6^th. The share of loans in forbearance has now declined for 15 straight weeks, with a larger decline this week as many reached the 15-month mark,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Forbearance exits increased – as is typical in the beginning of a month – and reached the fastest pace since April. New forbearance requests, at 4 basis points, remained at an extremely low level.”

Added Fratantoni, “We are seeing an increase in the share of forbearance exits, where borrowers do not have a loss mitigation plan in place. Homeowners who are reaching the end of their forbearance term need to contact their servicer to discuss the next steps in the process, as servicers cannot extend the forbearance term without talking to the borrower.”

Key findings of MBA’s Forbearance and Call Volume Survey – May 31 to June 6, 2021

Total loans in forbearance decreased by 12 basis points relative to the prior week: from 4.16% to 4.04%.
By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 5.54% to 5.22%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.18% to 2.09%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.31% to 8.33%.
By stage, 10.6% of total loans in forbearance are in the initial forbearance plan stage, while 83.6% are in a forbearance extension. The remaining 5.8% 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 6, 2021:
27.4% resulted in a loan deferral/partial claim.
24.3% represented borrowers who continued to make their monthly payments during their forbearance period.
15.3% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
13.9% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
10.1% 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 6.5% to 6.9%.
Average speed to answer increased from 1.2 minutes to 2.0 minutes.
Abandonment rates increased from 3.8% to 6.2%.
Average call length rose remained the same at 7.8 minutes.
Loans in forbearance as a share of servicing portfolio volume (#) as of June 6, 2021:
Total: 4.04% (previous week: 4.16%)
IMBs: 4.21% (previous week: 4.34%)
Depositories: 4.19% (previous week: 4.33%)