The Mortgage Bankers Association‘s (MBA) new monthly Loan Monitoring Survey reveals that the total number of loans now in forbearance decreased by 39 basis points from 2.06% of servicers’ portfolio volume in the prior month to 1.67%, as of Nov. 30.
According to the MBA’s estimate, 835,000 homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 16 basis points to 0.76%. Ginnie Mae loans in forbearance decreased 42 basis points to 2.10%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 106 basis points to 3.94%.
“The share of loans in forbearance in November declined – albeit at a slower pace than October – as borrowers continued to near the expiration of their forbearance plans and moved into permanent loan workout solutions,” says Marina Walsh, CMB, MBA’s vice president of industry analysis.
Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume (#) rose to 94.58% in November from 94.32% in October (on a non-seasonally adjusted basis). Total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/partial claims, loan modifications) that were current as a percent of total completed workouts declined to 83.69% last month from 84.04% in October.
“More borrowers were current on their mortgage payments in November compared to October. This coincides with continued improvement in the labor market – faster wage growth and the unemployment rate dropping to 4.2 percent,” adds Walsh. “While there was some deterioration in the performance of borrowers in post-forbearance workouts, four out of five overall remained current through November.”
Total loans in forbearance decreased by 39 basis points in November relative to October from 2.06% to 1.67%. By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior month from 2.52% to 2.10%. The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior month from 0.92% to 0.76%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior month from 5.00% to 3.94%. Loans in forbearance as a share of servicing portfolio volume (#) as of Nov. 30 include the total at 1.67% compared to the previous month at 2.06%, independent mortgage banks (IMBs) at 1.94% vs. 2.28%, and depositories at 1.52% vs. 2.02%.
By stage, 18.3% of total loans in forbearance are in the initial forbearance plan stage, while 68.4% are in a forbearance extension. The remaining 13.3% are forbearance re-entries, including re-entries with extensions.
Of the cumulative forbearance exits for the period from June 1, 2020, through Nov. 30, 2021, at the time of forbearance exit 29.1% resulted in a loan deferral/partial claim and 19.9% represented borrowers who continued to make their monthly payments during their forbearance period. Borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet represented 16.8%. In addition, 14.1% resulted in a loan modification or trial loan modification, 11.8% resulted in reinstatements (in which past-due amounts are paid back when exiting forbearance), and 6.9% 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.
The five states with the highest share of loans that were current as a percent of servicing portfolio are Idaho, Washington, Utah, Colorado and Oregon. The five states with the lowest share of loans that were current as a percent of servicing portfolio are Louisiana, Mississippi, New York, West Virginia and Oklahoma.
