The share of mortgages in COVID-19 related forbearance plans increased to 8.36% during the week ended May 17, according to the Mortgage Bankers Association. That’s up from 8.16% the previous week – but the rate of increase continues to slow.
Roughly 4.2 million homeowners are now in forbearance plans, according to the MBA’s estimates.
Mortgages backed by Ginnie Mae again had the largest overall share of loans in forbearance by investor type at 11.60%. Ginnie Mae loans also saw the largest increase from the previous week at 34 basis points.
The number of loans in forbearance for depository servicers increased to 9.13%, while the number of loans in forbearance for independent mortgage bank (IMB) servicers increased to 8.11%.
Over the past four weeks, the difference between the percentage of loans in forbearance for depository servicers compared to IMB servicers has narrowed, from 135 basis points as of April 19 to 102 basis points as of May 17.
“Although job losses continue at extremely high rates, mortgage servicers are reporting only modest increases in the share of loans in forbearance as of May 17,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “The decline in employment and income is hitting FHA and VA borrowers harder, leading to 11.6 percent of Ginnie Mae loans currently in forbearance.
“Forbearance requests declined relative to the prior week, and while call volume picked up, servicers appear well staffed for this volume, as wait times and abandonment rates dropped,” Fratantoni adds.
The share of Fannie Mae and Freddie Mac loans in forbearance increased to 6.36%, up from 6.25%.
The share of other loans (e.g., private-label securities and portfolio loans) in forbearance increased to 9.54%, up from 9.26%.
Forbearance requests as a percent of servicing portfolio volume dropped across all investor types for the sixth consecutive week relative to the prior week – from 0.32% to 0.28%.