Skip to main content

Forbearance Rate Drops 34 BPS

Katie Jensen
Oct 20, 2021

Forbearance decreased by 34 basis points from 2.62% of servicers' portfolio volume the previous week to 2.82%.

KEY TAKEAWAYS
  • Total number of loans in forbearance decreased by 34 basis points from 2.62% of servicers' portfolio volume to 2.82% for the week ending on October 10, 2021.
  • We are now down to 1.1 million homeowners in forbearance from a peak of 4.3 million homeowners in June 2020.
  • 14.8% of total loans in forbearance are in the initial forbearance stage, meanwhile 75.5% are in the forbearance extension stage. The remaining 9.7% are forbearance re-entries. 
  • The share of Fannie Mae and Freddie Mac loans in forbearance dropped to 1.05% or 16 basis points. Ginnie Mae loans in forbearance dropped to 2.77% or 17 basis points.

The latest Mortgage Bankers Association (MBA) Forbearance and Call Volume Survey revealed that the total number of loans in forbearance decreased by 34 basis points from 2.62% of servicers' portfolio volume the previous week to 2.82% for the week ending on October 10, 2021. The MBA survey estimates there are 1.1 million homeowners currently in forbearance plans. 

“Forbearance exits continued at an even more robust pace, resulting in a 34 basis-point decline in the overall forbearance rate. The decline was apparent across all servicer types and investor types,” said Mike Fratantoni, MBA's senior vice president and chief economist. “There was a substantial drop of over 1 percentage point in the forbearance rate for portfolio and PLS loans, which includes loans held for investment purposes, loans serviced for private investors, and government loans that were bought out of Ginnie Mae pools for the purposes of modifying them and then re-securitizing them into Ginnie Mae pools.”

The share of Fannie Mae and Freddie Mac loans in forbearance dropped to 1.05% or 16 basis points. Ginnie Mae loans in forbearance dropped to 2.77% or 17 basis points. The forbearance share for portfolio loans and private-label securities (PLS) fell by 108 basis points to 5.34%. Meanwhile, the percentage of loans for independent mortgage banks (IMB) servicers decreased by 25 basis points to 2.57% within one week. For depository servicers, the percentage of loans in forbearance fell 53 basis points to 2.16%. 

Broken down by stages, 14.8% of total loans in forbearance are in the initial forbearance stage, meanwhile 75.5% are in the forbearance extension stage. The remaining 9.7% are forbearance re-entries. 

“We are now down to 1.1 million homeowners in forbearance from a peak of 4.3 million homeowners in June 2020,” Fratantoni added. “Positive employment and wage prospects, continued home-price appreciation, and the availability of multiple loan workout options are factors that will smooth many homeowners' transition out of forbearance.”

Out of the cumulative forbearance exits from June 1, 2020, through October 10, 2021, 28.9% resulted in a loan deferral/partial claim. Roughly 20% continued to make monthly payments during the forbearance period, meanwhile 16.7% did not make all their monthly payments and exited forbearance without a loss mitigation plan. Nearly 13% resulted in a loan modification or trial loan modification. About 12% resulted in reinstatements, in which the past due amount is paid back when exiting forbearance. The remaining 7.1% resulted in loans paid off through refinance or selling the house, and 1.4% resulted in repayment plans, short sales, deed-in-lieus or other reasons.

 

Published
Oct 20, 2021
MBA Revises Originations Forecast Downward For 2023

Now predicts lenders will originate $1.98 trillion overall in mortgages in 2023, down 12% from 2022 and down 3.5% from its October forecast.

Analysis and Data
Nov 29, 2022
Home Price Growth Continued To Slow In 3Q

FHFA, S&P Case-Shiller indexes show slower monthly and annual growth in prices.

Analysis and Data
Nov 29, 2022
First American: Real House Prices Up Yet Again

The monthly RHPI report said potential sellers are unlikely to lose all the equity they have gained.

Analysis and Data
Nov 28, 2022
Redfin: Pandemic Boomtowns Are Cooling

Home-price growth has slowed fastest in pandemic boomtowns like Austin, Phoenix and Boise, with inflation and high mortgage rates to blame.

Analysis and Data
Nov 28, 2022
Mortgage Application Payments Rose 3.7% In October

Mortgage payments are up by $629 in the first 10 months of the year, a 45.5% increase.

Analysis and Data
Nov 22, 2022
Investor Interest In Housing Market Cools

Investors lost market share for the second quarter in a row.

Analysis and Data
Nov 22, 2022