MBA: Rate of Exits from Forbearance at Slowest Pace in Months

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The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey shows that the total number of loans in forbearance as of January 24 remained unchanged relative to the prior week, at 5.38% of servicers’ portfolio volume. That equates to 2.7 million homeowners in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.10% – a 1-basis-point improvement. Ginnie Mae loans in forbearance decreased 10 basis points to 7.51%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 22 basis points to 9.16%.

The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 2 basis points to 5.77%, and the percentage of loans in forbearance for depository servicers increased 1 basis point to 5.37%.  

“When servicers buy out delinquent loans from Ginnie Mae pools, they are reclassified as portfolio loans, which can lead to a decrease in the Ginnie Mae forbearance share and an increase in the portfolio/PLS share,” explains Mike Fratantoni, MBA’s senior vice president and chief economist.

“While new forbearance requests dropped slightly, the rate of exits from forbearance was at the slowest pace since MBA began tracking exit data last summer,” he adds. 

By stage, 18.07% of total loans in forbearance are in the initial forbearance plan stage, while 79.30% are in a forbearance extension. The remaining 2.64% are forbearance re-entries.

Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week, from 0.07% to 0.06%.

Of the cumulative forbearance exits for the period from June 1, 2020, through January 24, 2021:

  • 28.6% represented borrowers who continued to make their monthly payments during their forbearance period;
  • 25.5% resulted in a loan deferral/partial claim;
  • 15.6% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance;
  • 13.4% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet;
  • 7.5% resulted in a loan modification or trial loan modification;
  • 7.5% resulted in loans paid off through either a refinance or by selling the home; and
  • 1.9% resulted in repayment plans, short sales, deeds-in-lieu or other reasons.

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