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Number Of Loans In Forbearance Continues To Drop

Katie Jensen
Apr 19, 2022
MBA loans in forbearance March 2022

The MBA's Loan Monitoring Survey revealed that the total number of loans now in forbearance fell 13 basis points.

KEY TAKEAWAYS
  • The total number of loans now in forbearance fell 13 basis points from 1.18% of servicers’ portfolio volume to 1.05%.
  • Total current loans as a percentage of servicers’ portfolio volume rose to 95.47% in March 2022 from 94.94% in February 2022.
  • Total completed loan workouts from 2020 onward that were current as a percentage of total completed workouts rose to 83.67%.
  • States with the lowest share of current loans as a percentage of servicers’ portfolio were Louisiana, Mississippi, New York, West Virginia, and Oklahoma. 

Mortgage bankers Association (MBA) monthly Loan Monitoring Survey for March revealed that the total number of loans now in forbearance fell 13 basis points from 1.18% of servicers’ portfolio volume to 1.05%. The MBA estimates that a total of 525,000 homeowners are in forbearance.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 7 basis points to 0.49%. Ginnie Mae loans in forbearance decreased 12 basis points to 1.38% and the forbearance share for portfolio loans and private-labels securities (PLS) declined 28 basis points to 2.44%. 

“March was another month of lower forbearance rates, and a higher share of overall loans and forbearance-related workout loans that are current,” said MBA Vice President of Industry Analysis Marina Walsh. “The share of loans in forbearance continues to dwindle and is just 5 basis points shy of hitting 1 percent - or 500,000 homeowners - after peaking at 4.3 million borrowers in June 2020. It has been a remarkable recovery for many homeowners in less than two years.”

By stage, 29.7% of total loans in forbearance are in the initial forbearance plan stage, while 57.2% are in a forbearance extension. The remaining 13.1% are forbearance re-entries, including re-entries with extensions. 

Out of the cumulative forbearance exits from June 1, 2020 through March 31, 2022, 29% resulted in loan deferral or partial claim; 18.9% represented borrowers who continued to make their monthly payments during their forbearance period; 17.1% represented borrowers who did not make all their monthly payments and exited forbearance without a loss mitigation plan in place; 15.4% resulted in loan modification or trial loan modification; 11.4% resulted in reinstatements (in which past amounts are paid back when exiting forbearance); 6.7% resulted in loan paid off through either a refinance or by selling the home. 

Total current loans, meaning they are neither delinquent or in forbearance, as a percentage of servicers’ portfolio volume rose to 95.47% in March 2022 from 94.94% in February 2022 (on a seasonally adjusted basis). 

The five states with the highest share of current loans as a percentage of servicers’ portfolio were Idaho, Washington, Colorado, Utah, Oregon. 

The five states with the lowest share of current loans as a percentage of servicers’ portfolio were Louisiana, Mississippi, New York, West Virginia, and Oklahoma. 

Total completed loan workouts from 2020 onward — including repayment plans, loan deferrals/partial claims, loan modifications — that were current as a percentage of total completed workouts rose to 83.67% last month from 82.26% in February. 

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