The share of mortgage loans in forbearance increased to 0.34% as of September 30, as loan performance in government products weakened, according to the Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey.
About 170,000 homeowners are in forbearance plans, the MBA estimates.
Mortgage servicers have provided forbearance to approximately 8.3 million borrowers since March 2020.
Compared with August, the share of Fannie Mae and Freddie Mac loans in forbearance remained the same at 0.13%. The share Ginnie Mae loans in forbearance increased by 10 basis points to 0.76% – and the forbearance share for portfolio loans and private-label securities (PLS) increased 2 basis points to 0.37%.
“The percentage of loans in forbearance increased for the fourth consecutive month,” says Marina Walsh, CMB, vice president of industry analysis for the MBA, in a statement. “Since May 2024, Ginnie Mae loans in forbearance increased by almost 40 basis points, compared to six basis points for portfolio and PLS loans and three basis points for Fannie and Freddie loans.
“We are seeing some weakening in loan performance, particularly among government products,” Walsh adds. “Overall government loan performance reached a new low for the year in September. In addition, the share of government post-forbearance workouts that are current dropped considerably over the past four months. These trends indicate that some homeowners are exhibiting signs of distress – whether because of economic hardships, natural disasters, or other reasons.”
