Mortgage Forbearance Rates Experience Slight Decline In January 2024

The Mortgage Bankers Association found a marginal decrease in the total number of loans in forbearance in January 2024 compared to the previous month.

According to the survey, the total number of loans in forbearance decreased by one basis point, from 0.23% in December 2023 to 0.22% as of January 31, 2024. This slight decline equates to approximately 110,000 homeowners currently enrolled in forbearance plans. Since March 2020, mortgage servicers have extended forbearance to approximately 8.1 million borrowers.

In January 2024, the share of Fannie Mae and Freddie Mac loans in forbearance declined by two basis points to 0.13%. Ginnie Mae loans remained steady at 0.39%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by one basis point to 0.28%.

“The combination of a potential economic slowdown in 2024, and indications that consumer debt balances and delinquencies are on the rise, could lead to more homeowners struggling to make their mortgage payments and inquire about forbearance and available loan workout options,” MBA's Vice President of Industry Analysis Marina Walsh said. “Most pandemic-related protocols have sunset, which gives mortgage servicers different rules of engagement when it comes to assisting borrowers through loan forbearance or a loan workout.” 

Key findings from MBA's Loan Monitoring Survey for January 2024 include:

• Total loans in forbearance decreased by one basis point.
• Ginnie Mae loans in forbearance remained the same, while Fannie Mae and Freddie Mac loans decreased.
• Loans in forbearance as a share of servicing portfolio volume decreased to 0.22%.
• Most borrowers are in forbearance due to temporary hardships, COVID-19, or natural disasters.
• Over half of total loans in forbearance are in the initial forbearance plan stage.
• The majority of completed loan workouts were current repayment plans, deferrals, or modifications.
• Total loans serviced that were current increased to 95.67%.