Ginnie Mae, PLS Mortgage Loans See Forbearance Increase

Ginnie Mae, PLS Mortgage Loans See Forbearance Increase

September 9, 2020
Forbearance graphic
It’s a mixed bag when it comes for mortgage loans in forbearance. Some segments continue to see declines while others showed increases.
 
Overall, the Mortgage Bankers Association’s latest Forbearance and Call Volume Survey showed the number of loans in forbearance decreased by 4 basis points from 7.2% of servicers’ portfolio volume in the prior week to 7.16% as of Aug. 30, 2020. According to MBA’s estimate, 3.6 million homeowners are in forbearance plans.
 
However, Ginnie Mae loans in forbearance increased by 4 basis points for the second consecutive week to 9.62%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 1 basis point to 10.43%.
 
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 13th week in a row to 4.80% – an 8-basis-point improvement. The percentage of loans in forbearance for depository servicers decreased 9 basis points to 7.40%, while the percentage of loans in forbearance for independent mortgage bank (IMB) servicers remained unchanged at 7.41%.
 
“The share of Ginnie Mae loans in forbearance increased again this week, as the current economic crisis continues to disproportionately impact borrowers with FHA and VA loans. As a result, IMB servicers, which have roughly one-third of their portfolio with Ginnie Mae, had a forbearance share that was unchanged, while depositories, which have a larger share of GSE and portfolio loans, saw a decrease,” said Mike Fratantoni, MBA’s senior vice president and chief economist. 
 
Fratantoni added, “The labor market continued to heal in August, with strong job growth and a large decline in the unemployment rate. However, the economy still faces an uphill climb and remains far away from full employment. High unemployment, and jobless claims consistently around 1 million a week, continue to cause financial strain for some borrowers – and especially for those who work in industries hardest hit by the pandemic.”
 
Key findings of MBA's Forbearance and Call Volume Survey – Aug. 24 to Aug. 30, 2020
  • Total loans in forbearance decreased by 4 basis points relative to the prior week: from 7.20% to 7.16%.
  • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 9.58% to 9.62%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.88% to 4.80%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 10.44% to 10.43%.
  • By stage, 35.76% of total loans in forbearance are in the initial forbearance plan stage, while 63.29% are in a forbearance extension. The remaining 0.94% 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 0.09%, the lowest level reported for this series since March.
Weekly servicer call center volume:
  • As a percent of servicing portfolio volume (#), calls remained unchanged at 7.2%.
  • Average speed to answer increased from 2.2 minutes to 2.4 minutes.
  • Abandonment rates increased from 4.9% to 5.1%.
  • Average call length increased from 7.7 minutes to 7.8 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of August 30, 2020:
  • Total: 7.16% (previous week: 7.20%)
  • IMBs: 7.41% (previous week: 7.41%)
  • Depositories: 7.40% (previous week: 7.49%)
MBA’s latest Forbearance and Call Volume Survey represents 75% of the first-mortgage servicing market (37.3 million loans).
Trends, Servicing

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