The share of mortgage loans in forbearance decreased by 2 basis points month-over-month to 0.38% of servicers’ portfolios as of February 28, according to the Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey.
That’s down from 0.40% of servicers’ portfolio volume in January.
The MBA estimates that 190,000 homeowners were in forbearance plans, as of the end of February.
Mortgage servicers have provided approximately 8.6 million forbearances since March 2020.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.15% in February.
Ginnie Mae loans in forbearance decreased by 4 basis points to 0.84%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 3 basis points to 0.37%, according to the MBA’s data.
“Despite February’s monthly decline of loans in forbearance, the estimated number of forbearances and loan workouts increased compared to one year ago,” says Marina Walsh, CMB, vice president of industry analysis for the MBA, in a statement. “The year-over-year gain may be attributed to increasing escrow payments for taxes and insurance, inflationary pressures, natural disasters, aging servicing portfolios, and a softening in the labor market. At the same time, the performance of loan workouts and overall servicing portfolios weakened compared to one year ago.”
By reason, 73.0% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability. Another 24.2% are in forbearance because of a natural disaster. The remaining 2.8% of borrowers are still in forbearance because of COVID-19.
Photo: Erik Mclean