Loans In Forbearance Continued To Decline In December – NMP Skip to main content

Loans In Forbearance Continued To Decline In December

David Krechevsky
Jan 18, 2022
Forbearance

The Mortgage Bankers Association’s (MBA) new monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 26 basis points from 1.67% of servicers’ portfolio volume in the prior month to 1.41% as of Dec. 31, 2021.

According to MBA’s estimate, 705,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 8 basis points to 0.68%. Ginnie Mae loans in forbearance decreased 47 basis points to 1.63%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 51 basis points to 3.43%.

“The share of loans in forbearance continued to decline in December 2021. This was especially the case for government and private-label and portfolio loans, as those loans have higher levels of forbearance than loans backed by Fannie Mae and Freddie Mac,” said Marina Walsh, CMB, MBA’s vice president of industry analysis. “With the number of borrowers in forbearance continuing to decrease below 750,000, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020.”

Added Walsh, “It is likely that the remaining borrowers in forbearance have experienced either a permanent hardship that may require more complex loan workout solutions, or they have encountered a recent hardship for which they are now seeking relief.”

Highlights as of Dec. 31, 2021

  • Total loans in forbearance as percent of servicing portfolio volume (#) as of Dec. 31, 2021:
    • Total sample: 1.41% from 1.67% the previous month.
    • IMB sample: 1.66% from 1.94% the previous month.
    • Depository sample: 1.24% from 1.52% the previous month.
       
  • Monthly forbearance exits as a percent of servicing portfolio volume (#) decreased to 0.39% in December from 0.52% in the month of November.
  • Total loans that were current (not delinquent or in foreclosure) as percent of servicing portfolio volume (#) rose to 94.85% from 94.58% the previous month.
  • The five states with highest total loans that were current as percent of servicing portfolio: Idaho, Washington, Colorado, Utah, and Oregon.
  • The five states with lowest total loans that were current as percent of servicing portfolio: Louisiana, Mississippi, New York, Illinois, Indiana.
  • Total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/partial claims, loan modifications) that were current as percent of total completed workouts in servicing portfolio declined to 83.5% from 83.69% the previous month.
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