The share of mortgages in COVID-19-related forbearance plans continued to fall last week, driven by an eight-basis-point drop in the share of Fannie Mae and Freddie Mac loans to 4.80%, according to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey.
The share of Ginnie Mae loans in forbearance stood at 9.62%, an increase of four basis points relative to the prior week, when it was 9.58%.
The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased slightly to 10.43%, down from 10.44% the previous week.
All combined, the total share of mortgages in forbearance decreased by four basis points to 7.16%, down from 7.20%.
As of Aug. 30, roughly 3.6 million homeowners were in forbearance plans, according to the MBA’s data.
“The share of Ginnie Mae loans in forbearance increased again this [past] week, as the current economic crisis continues to disproportionately impact borrowers with FHA and VA loans,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “As a result, IMB servicers, which have roughly one-third of their portfolio with Ginnie Mae, had a forbearance share that was unchanged, while depositories, which have a larger share of GSE and portfolio loans, saw a decrease.
“The labor market continued to heal in August, with strong job growth and a large decline in the unemployment rate,” Fratantoni adds. “However, the economy still faces an uphill climb and remains far away from full employment. High unemployment, and jobless claims consistently around 1 million a week, continue to cause financial strain for some borrowers – and especially for those who work in industries hardest hit by the pandemic.”