MBA: Loans In Forbearance Dipped In August
Total loans in forbearance decreased by 2 basis points in August from July: from 0.74% to 0.72%.
- According to MBA’s estimate, 360,000 homeowners are in forbearance plans.
- 32.1% of total loans in forbearance are in the initial forbearance plan stage, while 54.4% are in a forbearance extension.
The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey reports that the total number of loans now in forbearance decreased by 2 basis points, from 0.74% of servicers’ portfolio volume in July to 0.72% as of Aug. 31.
By stage, 32.1% of total loans in forbearance are in the initial forbearance plan stage, while 54.4% are in a forbearance extension. The remaining 13.5% are forbearance re-entries, including re-entries with extensions, the report said.
According to MBA’s estimate, 360,000 homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.32%. Ginnie Mae loans in forbearance increased to 1.32%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 8 basis points to 1.26%.
“The overall number of loans in forbearance continues to trickle down, but there was an increase in Ginnie Mae forbearances in August,” said Marina Walsh, CMB, MBA’s vice president of industry analysis. “From January 2021 through May 2022, the Ginnie Mae forbearance rate was declining — albeit at a slower pace in 2022 compared to 2021. In June and July this year, the rate stayed flat."
"Last month," Walsh continued, "Ginnie Mae new forbearance requests and re-entries outpaced forbearance exits, and there was a decline in post-forbearance workout performance among government loans. Despite this activity, the overall performance of the Ginnie Mae portfolio still improved to 94.57% current.”
Walsh added that there "may be pressures on portfolio performance and post-forbearance workout performance in the months ahead — particularly for government loans — if the record-low unemployment rate rises and personal savings decreases amidst high inflation."
Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume increased to 95.85% in August 2022 from 95.59% in July 2022, on a non-seasonally adjusted basis.
The five states with the highest share of loans that were current as a percent of servicing portfolio were Idaho, Colorado, Washington, Utah, and Oregon.