Share Of Mortgages In Forbearance Decreases To 5.47%

November 17, 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 for the 11th week in a row from 5.67% of servicers’ portfolio volume in the prior week to 5.47% as of November 8, 2020 – a 20-basis-point improvement. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance dropped 13 basis points to 3.36%. Ginnie Mae loans in forbearance decreased 25 basis points to 7.70%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased by 32 basis points to 8.38%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 25 basis points to 5.94%, and the percentage of loans in forbearance for depository servicers decreased 17 basis points from the previous week to 5.43%.

“Declines in the share of loans in forbearance continued this week, with a significant increase in the rate of forbearance exits – particularly for portfolio and PLS loans,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “More than 76 percent of borrowers in forbearance are now in an extension, as we are well past the six-month point for most borrowers’ forbearance plans.”

Added Fratantoni, “While the rate of new forbearance requests has declined and exits are increasing, homeowners who continue to be impacted by hardships related to the pandemic should contact their servicer for relief.”

Key findings of MBA’s Forbearance and Call Volume Survey – November 2 to November 8, 2020

Total loans in forbearance decreased by 20 basis points relative to the prior week: from 5.67% to 5.47%.
By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.95% to 7.70%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 3.49% to 3.36%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.70% to 8.38%.
By stage, 21.68% of total loans in forbearance are in the initial forbearance plan stage, while 76.46% are in a forbearance extension. The remaining 1.86% are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.10% to 0.08%.
Of the cumulative forbearance exits for the period from June 1 through November 8, 2020:
30.6% represented borrowers who continued to make their monthly payments during their forbearance period.
23.9% resulted in a loan deferral/partial claim.
16.9% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
12.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
7.1% resulted in loans paid off through either a refinance or by selling the home.
6.8% resulted in a 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 8.1% to 8.3%.
Average speed to answer increased from 2.3 minutes to 2.4 minutes.
Abandonment rates increased from 6.0% to 6.3%.
Average call length increased from 7.9 minutes to 8.0 minutes – a survey high.
Loans in forbearance as a share of servicing portfolio volume (#) as of November 8, 2020:
Total: 5.47% (previous week: 5.67%)
IMBs: 5.94% (previous week: 6.19%)
Depositories: 5.43% (previous week: 5.60%)