The share of mortgages in COVID-19-related forbearance plans continued to drop this past week, falling to 7.21% of all loans, down from 7.44% the previous week, according to the Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey.
As of August 9, about 3.6 million homeowners were in forbearance plans, according to the MBA’s estimates.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 10th week in a row to 4.94%, a 25-basis-point improvement.
Ginnie Mae loans in forbearance decreased by 52 basis points to 9.54%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 22 basis points to 10.34%.
The percentage of loans in forbearance for depository servicers dropped to 7.49%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 7.42%.
“More homeowners exited forbearance last week, leading to the ninth straight drop in the share of loans in forbearance,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “However, the decline in Ginnie Mae loans in forbearance was again because of buyouts of delinquent loans from Ginnie Mae pools, which result in these FHA and VA loans being reported in the portfolio category.
“In a sign that more FHA and VA borrowers are struggling with a very tough job market, more Ginnie Mae borrowers requested than exited forbearance,” he adds.
Fratantoni points out that the share of Fannie Mae and Freddie Mac loans in forbearance dipped below 5% for the first time since April.
“Borrowers with conventional mortgages have been faring somewhat better throughout the current crisis, and there is no sign to date from these data that the risk to the GSEs is increasing,” he says.