Mortgages In Forbearance Drop To 7.2 Percent; Exit Pace Declines, Though

Mortgages In Forbearance Drop To 7.2 Percent; Exit Pace Declines, Though

August 24, 2020
forbearance loans
The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey revealed the number of loans in forbearance decreased by 1 basis point from 7.21% of servicers’ portfolio volume in the prior week to 7.2%.
 
According to the Mortgage Bankers Association's estimate, 3.6 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance also dropped by only 1 basis point to 4.93%. Ginnie Mae loans in forbearance were flat at 9.54%, while the forbearance share for portfolio loans and private-label securities increased by 3 basis points to 10.37%.
 
The percentage of loans in forbearance for depository servicers dropped 1 basis point to 7.48%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers increased 1 basis point to 7.43%.
 
“The share of loans in forbearance declined for the 10th week in a row, but the rate of improvement has slowed markedly. The extremely high rate of initial claims for unemployment insurance and high level of unemployment remain a concern, and are indications of the challenges many households are facing,” said Mike Fratantoni, the mortgage bankers' senior vice president and chief economist. “While new forbearance requests remain low, particularly for Fannie Mae and Freddie Mac loans, the pace of exits from forbearance has declined for two straight weeks.”
 
Key findings of MBA's Forbearance and Call Volume Survey – Aug. 10 to Aug. 16, 2020
• Total loans in forbearance decreased by 1 basis point relative to the prior week: from 7.21% to
7.20%.
o By investor type, the share of Ginnie Mae loans in forbearance remained the same at 9.54%.
o The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.94% to 4.93%.
o The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 10.34% to 10.37%.
• By stage, 37.91% of total loans in forbearance are in the initial forbearance plan stage, while 61.34% are in a forbearance extension. The remaining 0.75% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume decreased relative to the prior week: from 0.11% to 0.10%.
• Loans in forbearance as a share of servicing portfolio volume as of Aug. 16, 2020:
o Total: 7.20% (previous week: 7.21%)
o IMBs: 7.43% (previous week: 7.42%)
o Depositories: 7.48% (previous week: 7.49%)
 
MBA’s latest Forbearance and Call Volume Survey covers the period from Aug. 10 through Aug. 16, 2020, and represents 75% of the first-mortgage servicing market (37.3 million loans).
Residential, Originations, Trends

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