Mortgages In Forbearance Dip Below 1% – NMP Skip to main content

Mortgages In Forbearance Dip Below 1%

Steve Goode
May 17, 2022
Mortgage Bankers Association Logo

The MBA estimated that 470,000 homeowners are in forbearance plans.

KEY TAKEAWAYS
  • The five states with the highest share of loans that were current as a percent of servicing portfolio: Idaho, Washington, Colorado, Utah, and Oregon.
  • The five states with the lowest share of loans that were current as a percent of servicing portfolio: Louisiana, Mississippi, West Virginia, New York, and Oklahoma.

The percentage of mortgage loans in forbearance dropped below 1% in April, according to the Mortgage Bankers Association’s monthly Loan Monitoring Survey released Tuesday.

According to the survey, the total number of loans now in forbearance decreased by 11 basis points from 1.05% of servicers’ portfolio volume in March to 0.94% as of April 30.

The MBA estimated that 470,000 homeowners are in forbearance plans.

According to the survey, the share of Fannie Mae and Freddie Mac loans in forbearance also decreased 6 basis points to 0.43%.

Ginnie Mae loans in forbearance decreased 9 basis points to 1.29%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 29 basis points to 2.15%.

“With the number of borrowers in forbearance decreasing to less than half a million, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020,” Marina Walsh, CMB, MBA’s vice president of industry analysis, said. “Servicers are expected to continue making small incremental inroads to the remaining loans in forbearance.”

According to the survey, the improvement in the overall forbearance rate, the percentage of borrowers who were current on their mortgage payments increased to 95.64%, the highest level of 2022, despite potential headwinds such as high inflation and stock market volatility.

“The best indicator of loan performance is overall national employment,” Walsh said. “The U.S. unemployment rate is still below 4%, leaving borrowers in a good position to make their monthly mortgage payments.”

Other key findings of the April loan monitoring survey included:

Of the cumulative forbearance exits for the period from June 1, 2020, through April 30, 2022, at the time of forbearance exit:

29.3% resulted in a loan deferral/partial claim.

18.8% represented borrowers who continued to make their monthly payments during their forbearance period.

17.0% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.

15.6% resulted in a loan modification or trial loan modification.

11.3% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.

6.7% resulted in loans paid off through either a refinance or by selling the home.

The remaining 1.3% resulted in repayment plans, short sales, deed-in-lieus or other reasons.

The five states with the highest share of loans that were current as a percent of servicing portfolio: Idaho, Washington, Colorado, Utah, and Oregon.

The five states with the lowest share of loans that were current as a percent of servicing portfolio: Louisiana, Mississippi, West Virginia, New York, and Oklahoma.

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