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MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 3.87%"


by Calculated Risk on 7/06/2021 04:00:00 PM

Note: This is as of June 27th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 3.87%

The Mortgage Bankers Association’s (MBA) latest Forbearance and
Call Volume Survey revealed that the total number of loans now in forbearance decreased by 4 basis
points from 3.91% of servicers’ portfolio volume in the prior week to 3.87% as of June 27, 2021.
According to MBA’s estimate, 1.9 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 1.99%.
Ginnie Mae loans in forbearance decreased 3 basis points to 5.10%, while the forbearance share for
portfolio loans and private-label securities (PLS) decreased 5 basis points to 7.92%. The percentage of
loans in forbearance for independent mortgage bank (IMB) servicers decreased 3 basis points to 4.00%,
and the percentage of loans in forbearance for depository servicers declined 3 basis points to 4.11%.

“For the first time since last March, the share of Fannie Mae and Freddie Mac loans in forbearance
dropped below 2 percent. The share in every investor type and almost every loan category dropped as
well, bringing the number of homeowners in forbearance below 2 million,” said Mike Fratantoni, MBA’s
Senior Vice President and Chief Economist. “The rate of forbearance exits and new forbearance requests
remained at low levels, but we expect the pace of exits to increase with reporting next week for the
beginning of July.”

Added Fratantoni, “Strong job growth in June should provide a springboard for further improvements in
the forbearance numbers over the next month.”
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 (#) remained the same relative to the prior week at 0.04%”.

Note: Deferral plans are very popular. Basically when the homeowner exits forbearance, they just go back to making their regular monthly payments, they are not charged interest on the missed payments, and the unpaid balanced is deferred until the end of the mortgage.

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