The share of mortgages in forbearance continued to decrease during the week ended Sept. 20, falling to 6.87% of all loans, down from 6.93% the previous week, according to the Mortgage Bankers Association (MBA).
Currently about 3.4 million homeowners are in forbearance plans, according to the MBA’s Forbearance and Call Volume Survey.
Requests for forbearances increased slightly, but remain at a trickle compared with March and April.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 16th week in a row to 4.46% – a nine-basis-point improvement.
Ginnie Mae loans in forbearance remained flat compared to the previous week at 9.15%, and the forbearance share for portfolio loans and private-label securities (PLS) also remained flat, at 10.52%.
The percentage of loans in forbearance for depository servicers decreased seven basis points to 7.11%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased three basis points to 7.23%.
“The share of loans in forbearance continues to decline and is now at a level not seen since mid-April,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Many homeowners with GSE loans are exiting forbearance into a deferral plan and resuming their original mortgage payment, but waiting to pay the forborne amount until the end of the loan.
“However, the overall picture is still somewhat of a mixed bag,” Fratantoni adds. “The recent uptick in forbearance requests, particularly for those with FHA or VA loans, is leaving the Ginnie Mae share elevated, as the pace of new requests meets or exceeds the pace of exits.”
As per the most recent data from the Bureau of Labor Statistics, the U.S. unemployment has fallen to around 8.4%, with many still to be regained in the hospitality and travel industries.
“The continued churn in the job market is likely keeping many homeowners who have been in forbearance reluctant to exit, given the level of economic uncertainty,” Fratantoni says.