Mortgages in forbearance continued their ninth straight week of decline. Unlike in some weeks, the decline is seen along all segments of the market.
The
Mortgage Bankers Association’s latest forbearance and call volume survey revealed that the total number of loans now in forbearance decreased by 23 basis points from 7.44% of servicers’ portfolio volume in the prior week to 7.21% as of Aug. 9, 2020. According to the association’s estimate, 3.6 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 10th week in a row to 4.94% – a 25-basis-point improvement. Ginnie Mae loans in forbearance decreased by 52 basis points to 9.54%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 22 basis points to 10.34%. The percentage of loans in forbearance for depository servicers dropped to 7.49%, and the percentage of loans in forbearance for independent mortgage bank servicers decreased to 7.42%.
“More homeowners exited forbearance last week, leading to the ninth straight drop in the share of loans in forbearance. However, the decline in Ginnie Mae loans in forbearance was again because of buyouts of delinquent loans from Ginnie Mae pools, which result in these FHA and VA loans being reported in the portfolio category,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “In a sign that more FHA and VA borrowers are struggling with a very tough job market, more Ginnie Mae borrowers requested than exited forbearance.”
Added Fratantoni, “The share of Fannie Mae and Freddie Mac loans in forbearance has dropped below 5% for the first time since April. Borrowers with conventional mortgages have been faring somewhat better throughout the current crisis, and there is no sign to date from these data that the risk to the GSEs is increasing.”
Key findings of MBA's Forbearance and Call Volume Survey – Aug. 3 to Aug. 9, 2020
• Total loans in forbearance decreased by 23 basis points relative to the prior week: from 7.44%
to 7.21%.
• By stage, 38.80% of total loans in forbearance are in the initial forbearance plan stage, while
60.49% are in a forbearance extension. The remaining 0.70% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased
relative to the prior week from 0.12% to 0.11%.
• Weekly servicer call center volume:
• Loans in forbearance as a share of servicing portfolio volume (#) as of August 9, 2020:
