Share Of Mortgages In Forbearance Decreases To 5.37%

January 20, 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 from 5.46% of servicers’ portfolio volume in the prior week to 5.37% as of January 10, 2021. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.13% – a 6-basis-point improvement. Ginnie Mae loans in forbearance decreased 18 basis points to 7.67%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased by 9 basis points to 8.68%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 13 basis points from the previous week to 5.79%, and the percentage of loans in forbearance for depository servicers decreased 6 basis point to 5.33%.

“The week of January 10^th saw the largest – and only the second – decrease in the share of loans in forbearance in nine weeks, with declines across almost every tracked loan category,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The rate of exits from forbearance has picked up a bit over the past two weeks but remains much lower than what was seen in October and early November.”

Fratantoni added, “Job market data continue to indicate weakness, and that means many homeowners who remain unemployed will need ongoing relief in the form of forbearance. While new forbearance requests remain relatively low, the availability of relief remains a necessary support for many homeowners.”

Key findings of MBA’s Forbearance and Call Volume Survey – January 4 to January 10, 2021

Total loans in forbearance decreased by 9 basis points relative to the prior week: from 5.46% to 5.37%.
By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.85% to 7.67%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.19% to 3.13%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.77% to 8.68%.
By stage, 17.27% of total loans in forbearance are in the initial forbearance plan stage, while 80.45% are in a forbearance extension. The remaining 2.28% are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.07%.
Of the cumulative forbearance exits for the period from June 1, 2020 through January 10, 2021:
28.8% represented borrowers who continued to make their monthly payments during their forbearance period.
25.2% resulted in a loan deferral/partial claim.
15.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
13.5% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
7.4% resulted in loans paid off through either a refinance or by selling the home.
7.4% resulted in a loan modification or trial loan modification.
The remaining 1.9% 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 from the previous week from 7.2% to 9.2%.
Average speed to answer increased from 2.7 minutes to 3.6 minutes.
Abandonment rates increased from 7.0% to 9.1%.
Average call length increased from 7.8 minutes to 8.5 minutes, a survey high.
Loans in forbearance as a share of servicing portfolio volume (#) as of January 10, 2021:
Total: 5.37% (previous week: 5.46%)
IMBs: 5.79% (previous week: 5.92%)
Depositories: 5.33% (previous week: 5.39%)