The share of mortgages in COVID-19-related forbearance plans continued to shrink last week, falling to 7.44% of all loans, down from 7.67% the previous week, according to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey.
As of the week ended August 8, roughly 3.7 million homeowners were in forbearance plans, the MBA estimates.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for a ninth week to 5.19%.
Ginnie Mae loans in forbearance decreased to 10.06%.
The share for portfolio loans and private-label securities (PLS) ion forbearance decreased to 10.12%.
Independent mortgage bank servicers, at 7.71%, surpassed depository servicers, at 7.63%, for the highest share of loans in forbearance.
“The share of loans in forbearance declined at a more rapid pace last week, with many borrowers who had been making payments while in forbearance deciding to exit,” says Mike Fratantoni, senior vice president and chief economist for the MBA in a release. “New forbearance requests increased, but are still well below the level of exits. Some of the decline in the share of Ginnie Mae loans in forbearance was due to additional buyouts of delinquent loans from Ginnie Mae pools, which result in these FHA and VA loans being reported in the portfolio category.
“The job market data in July came in better than expected,” Fratantoni adds. “However, the unemployment rate is still quite high, and the elevated level of layoffs and slowing pace of hiring will make it more difficult for borrowers to get back on track – particularly if there is not an extension of relief.”