The share of mortgages in COVID-19-related forbearance plans continued to fall during the week ended October 11, dropping to 5.92% of servicers’ portfolio volume, according to the Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey.
That’s down a whopping 40 basis points from 6.32% the previous week.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 19th week in a row to 3.77% – a 26-basis-point improvement.
Ginnie Mae loans in forbearance decreased 13 basis points to 8.14%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 120 basis points to 8.86%.
The percentage of loans in forbearance for depository servicers decreased 60 basis points to 5.93%, and the percentage of loans in forbearance for independent mortgage bank servicers decreased 32 basis points to 6.33%.
“The share of loans in forbearance declined across all loan types, primarily because of borrower forbearance plans expiring at the six-month mark,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Federally backed loans under the CARES Act are eligible to be extended for up to 12 months, but borrowers must contact their servicer for an extension. Without that contact, borrowers exit forbearance, whether they are delinquent or current on their loan. Borrowers with federally backed mortgages should contact their servicer if they still have a hardship due to the pandemic.”
“The steady improvement for Fannie Mae and Freddie Mac loans highlights the improvement in some segments of the job market and broader economy,” he adds. “The slower decline for Ginnie Mae loans continues to show that this improvement has not been uniform, and that many are still struggling to regain their footing.”
Incoming requests for mortgage forbearance plans also continued to decrease.