The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey reveals that the total number of loans now in forbearance decreased by six basis points from 0.39% of servicers’ portfolio volume in the prior month to 0.33% as of August 31.
According to MBA’s estimate, 165,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 7.92 million borrowers since March 2020.
In August, the share of Fannie Mae and Freddie Mac loans in forbearance decreased one basis point to 0.19%. Ginnie Mae loans in forbearance decreased 15 basis points to 0.65%, and the forbearance share for portfolio loans and private-label securities decreased six basis points to 0.39%.
“The forbearance rate is just eight basis points shy of where it was at the beginning of March 2020, which indicates that most homeowners have recovered from the pandemic,” says Marina Walsh, MBA’s vice president of industry analysis.
“While there was a monthly decline in the performance of post-forbearance workouts in August, overall mortgage servicing portfolios remain resilient,” adds Walsh. “Compared to other credit types with weaker performance, the percentage of home mortgages that are performing is holding steady at a non-seasonally adjusted 96%.”
Some key findings of MBA’s Loan Monitoring Survey:
- By reason, 60.4% of borrowers are in forbearance because of COVID-19. Another 7.2% are in forbearance because of a natural disaster. The remaining 32.4% of borrowers are in forbearance for other reasons such as a temporary hardship caused by job loss, death, divorce, disability, etc.
- By stage, 39.7% of total loans in forbearance are in the initial forbearance plan stage, while 51.6% are in a forbearance extension. The remaining 8.6% are forbearance re-entries, including re-entries with extensions.
- The five states with the highest share of loans that were current as a percent of servicing portfolio: Washington, Idaho, Colorado, Oregon and California.
- The five states with the lowest share of loans that were current as a percent of servicing portfolio: Mississippi, Louisiana, Indiana, New York and West Virginia.
- 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 decreased to 73.43% in August from 73.73% the previous month.