Share of U.S. Mortgages in Forbearance Dips to 7.8 Percent in Mid-July

It's the fifth consecutive weekly decline

This week the Mortgage Bankers Association's latest Forbearance and Call Volume Survey revealed that the total number of U.S. loans now in forbearance decreased by 38 basis points from 8.18% of servicers' portfolio volume in the prior week to 7.80% as of July 12, 2020. According to MBA's estimate, 3.9 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the sixth week in a row to 5.64%, a 43-basis-point improvement. Ginnie Mae loans in forbearance decreased 30 basis points to 10.26%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 52 basis points to 10.41%. The percentage of loans in forbearance for depository servicers dropped to 8.23%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 7.83%.

"The share of loans in forbearance dropped to its lowest level in over two months, driven by an increase in the pace of exits as more homeowners have been able to get back to work," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "The decline in the forbearance share was broad based, with decreases for GSE, Ginnie Mae, and portfolio/PLS loans."

Added Fratantoni, "Almost half of borrowers remaining in forbearance are now in an extension of the original term, while the remainder are in their initial forbearance plan. The pace of new forbearance requests remains quite low compared to earlier in the crisis, but we are watching carefully for any increases due to either the pick-up in COVID-19 cases or the cessation of enhanced unemployment insurance benefits at the end of this month."

Key findings of MBA's Forbearance and Call Volume Survey - July 6 to July 12, 2020

• Total loans in forbearance decreased by 38 basis points relative to the prior week: from 8.18% to 7.80%.

• By investor type, the share of Ginnie Mae loans in forbearance decreased: from 10.56% to 10.26%.
• The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 6.07% to 5.64%.
• The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 10.93% to 10.41%.

• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained flat relative to the prior week at 0.13%.

• Weekly servicer call center volume:

• As a percent of servicing portfolio volume (#), calls increased from 7.8% to 8.3%.
• Average speed to answer increased relative to the prior week from 2.5 minutes to 2.6 minutes.
• Abandonment rates decreased slightly from 7.4% to 7.2%
• Average call length increased from 7.4 minutes to 7.6 minutes.

• Loans in forbearance as a share of servicing portfolio volume (#) as of July 12, 2020:

• Total: 8.18% (previous week: 8.39%)
• IMBs: 7.83% (previous week: 8.10%)
• Depositories: 8.23% (previous week: 8.80%)

MBA's latest Forbearance and Call Volume Survey covers the period from July 6 through July 12, 2020, and represents 75% of the first-mortgage servicing market (37.3 million loans).