The share of mortgages in COVID-19-related forbearance plans continued to fall during the week ended July 12, dropping 38 basis points to 7.80% of all loans in servicer portfolios, down from 8.18% the previous week, according to the Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey.
It was the fifth consecutive week that the share of mortgages in forbearance decreased.
As of July 12, about 3.9 million homeowners were in forbearance plans, the MBA estimates.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the sixth week to 5.64%, a 43-basis-point improvement.
Ginnie Mae loans in forbearance decreased 30 basis points to 10.26%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 52 basis points to 10.41%.
The percentage of loans in forbearance for depository servicers dropped to 8.23%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 7.83%
“The share of loans in forbearance dropped to its lowest level in over two months, driven by an increase in the pace of exits as more homeowners have been able to get back to work,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “The decline in the forbearance share was broad based, with decreases for GSE, Ginnie Mae, and portfolio/PLS loans.
“Almost half of borrowers remaining in forbearance are now in an extension of the original term, while the remainder are in their initial forbearance plan,” Fratantoni adds. “The pace of new forbearance requests remains quite low compared to earlier in the crisis, but we are watching carefully for any increases due to either the pick-up in COVID-19 cases or the cessation of enhanced unemployment insurance benefits at the end of this month.”