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MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 2.62%"

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by Calculated Risk on 10/11/2021 04:05:00 PM

Note: This is as of October 3rd.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 2.62%

The Mortgage Bankers Association’s (MBA) latest
Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance
decreased by 27 basis points from 2.89% of servicers’ portfolio volume in the prior week to 2.62% as of
October 3, 2021. According to MBA’s estimate, 1.3 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 17 basis points to 1.21%.
Ginnie Mae loans in forbearance decreased 41 basis points to 2.94%, and the forbearance share for
portfolio loans and private-label securities (PLS) declined 35 basis points to 6.42%. The percentage of
loans in forbearance for independent mortgage bank (IMB) servicers decreased 37 basis points relative
to the prior week to 2.82%, and the percentage of loans in forbearance for depository servicers
decreased 24 basis points to 2.69%.

“Many borrowers reached the expiration of their forbearance term as we entered October. The pace of
exits climbed to the fastest pace in over a year, and the share of loans in forbearance declined at the
fastest rate since last October, dropping by 27 basis points. The decline was the largest for Ginnie Mae
and portfolio/PLS loans,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.
“Payment performance has remained steady for those who have exited forbearance and into a workout
since 2020, with more than 85% of those borrowers current as of October. It also continues to be
striking that so many homeowners in forbearance have continued to make their payments. Almost 16
percent of borrowers in forbearance as of October 3rd were current.”

Added Fratantoni, “Job growth was weaker than expected in September, reflecting the challenges from
the Delta variant, ongoing supply-chain issues, and the resulting slowdowns in workplace and school reopenings. However, the drop in the unemployment rate, rising wages, and abundant job openings will
continue to help support the housing market, including helping borrowers exit forbearance successfully
in the weeks ahead.”
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time. Most of the increase was in late March and early April 2020, and has trended down since then.

The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.04% to 0.05%.”

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