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Mortgage Loans In Forbearance Dips To 2.15%

Nov 02, 2021
Forbearance graphic

MBA weekly survey finds 1.1 million homeowners in a forbearance plan as of Oct. 24, 2021

The total number of loans now in forbearance nationwide decreased slightly in the past week, according to the Mortgage Bankers Association.

The MBA’s latest Forbearance and Call Volume Survey revealed that 1.1 million, or 2.15%, of homeowners are in forbearance plans as of Oct. 24, down from 2.21% a week earlier.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 0.97%, the MBA said. Ginnie Mae loans in forbearance decreased 7 basis points to 2.65%, and the forbearance share for portfolio loans and private-label securities declined 8 basis points to 5.13%.

The MBA said loans in forbearance for independent mortgage bank (IMB) servicers decreased 6 basis points from the previous week to 2.43%, while loans in forbearance for depository servicers decreased 4 basis points to 2.07%. 

"For the first time since March 2020, the share of Fannie Mae and Freddie Mac loans in forbearance dropped below 1%,” MBA’s Senior Vice President and Chief Economist Mike Fratantoni said. “A small decline for this investor category was matched by similarly small declines for Ginnie Mae and portfolio/PLS loans."

Fratantoni  added that forbearance exits “slowed at the end of October to the slowest pace since late August. With so many borrowers having reached the end of their 18-month forbearance term, we expect a steady pace of exits in November."

Some other key findings from the MBA’s survey for the week of Oct. 18-24, 2021:

  • By stage, 15.6% of total loans in forbearance are in the initial forbearance plan stage, while 74.2% are in a forbearance extension. The remaining 10.2% are forbearance re-entries, including re-entries with extensions.
  • Total weekly forbearance requests as a percentage of servicing portfolio volume remained the same relative to the prior week at 0.04%.

Of the cumulative forbearance exits for the period from June 1, 2020, through Oct. 24, 2021, at the time of forbearance exit:

  • 29.1% resulted in a loan deferral/partial claim.
  • 20.6% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 16.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 13.1% resulted in a loan modification or trial loan modification.
  • 12.0% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 7.1% resulted in loans paid off through either a refinance or by selling the home.
  • The remaining 1.4% resulted in repayment plans, short sales, deed-in-lieus or other reasons

MBA's latest Forbearance and Call Volume Survey represents 73% of the first-mortgage servicing market, or 36.7 million loans.

About the author
David Krechevsky was an editor at NMP.
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