The Mortgage Bankers Association‘s (MBA) latest Forbearance and Call Volume Survey shows that the total number of loans in forbearance decreased by 27 basis points from 2.89% of servicers’ portfolio volume in the prior week to 2.62% as of October 3, 2021. According to MBA’s estimate, 1.3 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 17 basis points to 1.21%. Ginnie Mae loans in forbearance decreased 41 basis points to 2.94%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 35 basis points to 6.42%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 37 basis points relative to the prior week to 2.82%, and the percentage of loans in forbearance for depository servicers decreased 24 basis points to 2.69%.
“Many borrowers reached the expiration of their forbearance term as we entered October. The pace of exits climbed to the fastest pace in over a year, and the share of loans in forbearance declined at the fastest rate since last October, dropping by 27 basis points. The decline was the largest for Ginnie Mae and portfolio/PLS loans,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.
“Payment performance has remained steady for those who have exited forbearance into a workout since 2020, with more than 85% of those borrowers current as of October,” adds Fratantoni. “It also continues to be striking that so many homeowners in forbearance have continued to make their payments. Almost 16 percent of borrowers in forbearance as of October 3rd were current.”
“Job growth was weaker than expected in September, reflecting the challenges from the Delta variant, ongoing supply chain issues, and the resulting slowdowns in workplace and school re-openings,” continues Fratantoni. “However, the drop in the unemployment rate, rising wages, and abundant job openings will continue to help support the housing market, including helping borrowers exit forbearance successfully in the weeks ahead.”
Total loans in forbearance decreased by 27 basis points relative to the prior week from 2.89% to 2.62%. By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week from 3.35% to 2.94%.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week from 1.38% to 1.21%. The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week from 6.77% to 6.42%.
By stage, 13.3% of total loans in forbearance are in the initial forbearance plan stage, while 77.5% are in a forbearance extension. The remaining 9.2% are forbearance re-entries.
Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.04% to 0.05%. Of the cumulative forbearance exits for the period from June 1, 2020, through October 3, 2021, at the time of forbearance exit 28.8% resulted in a loan deferral/partial claim.
Borrowers who continued to make their monthly payments during their forbearance period represented 21.3% while 16.5% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
In addition, 12.6% resulted in a loan modification or trial loan modification, 12.3% resulted in reinstatements, and 7.2% 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.
MBA’s latest Forbearance and Call Volume Survey covers the period from September 27 through October 3, 2021, and represents 73% of the first-mortgage servicing market (36.5 million loans).