Residential Real Estate News
Mortgage Loans in Forbearance Dips to 3.5 Percent in the U.S.
The Mortgage Bankers Association's latest Forbearance and Call Volume Survey revealed this week that the total number of loans now in forbearance decreased by 26 basis points from 3.76% of servicers' portfolio volume in the prior week to 3.50% as of July 11, 2021. According to MBA's estimate, 1.75 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 8 basis points to 1.83%. Ginnie Mae loans in forbearance decreased 42 basis points to 4.36%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased 61 basis points to 7.33%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 19 basis points to 3.68%, and the percentage of loans in forbearance for depository servicers decreased 36 basis points to 3.62%.
"Forbearance exits edged up again last week and new forbearance requests dropped to their lowest level since last March, leading to the largest weekly drop in the forbearance share since last October and the 20th consecutive week of declines," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "The forbearance share decreased for every investor and servicer category."
Added Fratantoni, "The latest economic data regarding the job market and consumer spending continue to show a robust pace of economic recovery, which is supporting further improvements in the forbearance numbers as more homeowners are able to resume their payments."
Key Report Data Includes:
- Total loans in forbearance decreased by 26 basis points relative to the prior week: from 3.76% to 3.50%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 4.78% to 4.36%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.91% to 1.83%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 7.94% to 7.33%.
- By stage, 9.8% of total loans in forbearance are in the initial forbearance plan stage, while 83.4% are in a forbearance extension. The remaining 6.8% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.04% to 0.03% - the lowest level reported since the week ending March 15, 2020.
- Of the cumulative forbearance exits for the period from June 1, 2020, through July 11, 2021:
- 28.0% resulted in a loan deferral/partial claim.
- 23.2% represented borrowers who continued to make their monthly payments during their forbearance period.
- 15.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 13.5% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 10.7% resulted in a loan modification or trial loan modification.
- 7.4% resulted in loans paid off through either a refinance or by selling the home.
- The remaining 1.5% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
- Weekly servicer call center volume:
- As a percent of servicing portfolio volume (#), calls decreased relative to the prior week: from 7.3% to 6.4%.
- Average speed to answer increased from 1.5 minutes to 2.0 minutes.
- Abandonment rates increased from 4.5% to 4.7%.
- Average call length increased from 8.0 minutes to 8.1 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of July 11, 2021:
- Total: 3.50% (previous week: 3.76%)
- IMBs: 3.68% (previous week: 3.87%)
- Depositories: 3.62% (previous week: 3.98%)
