After increasing for two straight weeks, the share of mortgages in COVID-19-related forbearance plans fell to 5.48% of servicers’ portfolio volume during the week ended Dec. 6, down from 5.54% the previous week, according to the Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey.
Roughly 2.7 million homeowners are in forbearance plans, the MBA estimates.
However, the MBA notes that there has been slight uptick in new requests for forbearance – meaning that as homeowners exit forbearance new ones are entering, thus slowing the recovery.
The increase in new requests is to be expected when considering the recent surge of new coronavirus cases across the U.S. and the resulting wave of business shutdowns.
As per the MBA’s data, the share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.26%, a decrease of eight basis points.
Ginnie Mae loans in forbearance decreased 21 basis points to 7.68%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 19 basis points to 8.89%.
The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased four basis points from the previous week to 5.98%, and the percentage of loans in forbearance for depository servicers decreased 10 basis points from the previous week to 5.38%.
“The share of loans in forbearance decreased in the first week of December,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “However, more borrowers sought relief, with new forbearance requests reaching their highest level since the week ending August 2, and servicer call volume hitting its highest level since the week ending April 19.
“Compared to the last two months, more homeowners exiting forbearance are using a modification – a sign that they have not been able to fully get back on their feet, even if they are working again,” Fratantoni says.
“The latest economic data is showing a slowdown, particularly an increase in layoffs and long-term unemployment,” he adds. “Coupled with the latest surge in COVID-19 cases, it is not surprising to see more homeowners seeking relief.”
