Share of Loans in Forbearance Decreased for Eighth Straight Week

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According to the Mortgage Bankers Association’s (MBA Forbearance and Call Volume Survey for the week ending April 18, the total percentage of loans in forbearance was 4.49%, representing about 2.25 million homeowners.

This figure was down just 1 basis point from the week prior, the MBA says.

The share of Fannie Mae and Freddie Mac loans in forbearance remained the same relative to the prior week at 2.44%. Ginnie Mae loans in forbearance decreased 7 basis points to 6.09%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 8 basis points to 8.42%.

The percentage of loans in forbearance for independent mortgage bank (IMB) servicers remained the same relative to the prior week at 4.72%, and the percentage of loans in forbearance for depository servicers declined 3 basis points to 4.64%.

“After two weeks of large declines, the share of loans in forbearance decreased for the eighth straight week, but by only 1 basis point,” says Mike Fratantoni, the MBA’s senior vice president and chief economist.

“New forbearance requests increased, and the rate of exits declined,” he adds. “More than 40 percent of borrowers in forbearance extensions have now exceeded the 12-month mark.”

The MBA says 12.9% of loans in forbearance are in the initial forbearance plan stage, while 82.4% are in a forbearance extension. The remaining 4.7% are forbearance re-entries.

Of the cumulative forbearance exits for the period from June 1, 2020, through April 18,

  • 26.9% resulted in a loan deferral/partial claim.
  • 25.4% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 14.6% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 14.4% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 9.6% 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.
  • The remaining 1.6% resulted in repayment plans, short sales, deeds-in-lieu or other reasons.

Photo by inkknife_2000, licensed under CC BY-SA 2.0

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