The share of mortgage loans in forbearance continued to fall in January, reaching a mere sliver of what it was following the start of the pandemic in February 2020.
According to the Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey, the total number of loans in forbearance decreased by 1 basis point to 0.22% of servicers’ portfolio volume, down from 0.23% in December.
Roughly 110,000 homeowners are currently in forbearance plans, according to the MBA’s data.
Mortgage servicers have provided forbearance to approximately 8.1 million borrowers since March 2020.
In January, the share of Fannie Mae and Freddie Mac loans in forbearance declined 2 basis points to 0.13%.
Ginnie Mae loans in forbearance remained the same at 0.39%, and the forbearance share for portfolio loans and private-label securities (PLS) increased 1 basis point to 0.28%.
“The combination of a potential economic slowdown in 2024, and indications that consumer debt balances and delinquencies are on the rise, could lead to more homeowners struggling to make their mortgage payments and inquire about forbearance and available loan workout options,” explains Marina Walsh, CMB, vice president of industry analysis for the MBA, in the report.
“Most pandemic-related protocols have sunset, which gives mortgage servicers different rules of engagement when it comes to assisting borrowers through loan forbearance or a loan workout.”