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MBA: Total Loans In Forbearance Dipped In June 2022

Sarah Wolak
Jul 19, 2022
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June decreased to 0.81% from May's 0.85%.

KEY TAKEAWAYS
  • The MBA estimates that 405,000 homeowners are in forbearance plans.
  • The share of Fannie Mae and Freddie Mac loans in forbearance slipped down 3 basis points to 0.35%.

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey found that the total number of loans now in forbearance decreased by 4 basis points from 0.85% of servicers’ portfolio volume in the prior month to 0.81% as of June 30. 

According to MBA’s estimate, 405,000 homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 0.35%.

Ginnie Mae loans in forbearance increased 1 basis point to 1.26%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 18 basis points to 1.68%.

By stage, 29.8% of total loans in forbearance are in the initial forbearance plan stage, while 57.6% are in a forbearance extension. The remaining 12.6% are forbearance re-entries, which includes re-entries with extensions.

“The overall forbearance rate in June stayed relatively flat with just a 4-basis-point decline from May,” said Marina Walsh, MBA’s vice president of industry analysis. “Borrowers continue to exit forbearance, but at a much slower pace than six or nine months ago. New forbearance requests are still trickling in, as permitted under the CARES Act, resulting in very little movement in the overall percentage of loans in forbearance.”

Walsh added, “There are some early indicators of borrower stress resulting from high inflation and rising interest rates, among other factors. For example, overall servicing portfolio performance dropped by 14 basis points to 95.71% current in June, and the performance of post-forbearance workouts declined by 140 basis points to 81.34%. It is worth monitoring post-forbearance workouts — particularly for borrowers with government loans, who are typically the most vulnerable to economic slowdowns.”

In addition, the total of loans serviced that were current — meaning not delinquent or in foreclosure — as a percent of servicing portfolio volume dropped to 95.71% in June 2022 from 95.85% in May 2022. 

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