Residential Real Estate News
Mortgage Loans in Forbearance Dips to 3.48 Percent in July
Based on the Mortgage Bankers Association's latest Forbearance and Call Volume Survey, the total number of loans now in forbearance decreased by 2 basis points from 3.50% of servicers' portfolio volume in the prior week to 3.48% as of July 18, 2021. According to MBA's estimate, 1.74 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 1.81%. Ginnie Mae loans in forbearance decreased 1 basis point to 4.35%, while the forbearance share for portfolio loans and private-label securities (PLS) increased 5 basis points to 7.38%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers remained the same relative to the prior week at 3.68%, and the percentage of loans in forbearance for depository servicers decreased 1 basis point to 3.61%.
"As is typical for mid-month reporting, forbearance exits slowed, and there was a slight increase in new requests. The net result was a small drop in the share of loans in forbearance - the 21st consecutive week of declines," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "The forbearance share decreased for GSE and Ginnie Mae loans, but increased for portfolio and PLS loans, as new forbearance requests increased for this category."
Key findings of MBA's Forbearance and Call Volume Survey
- Total loans in forbearance decreased by 2 basis points relative to the prior week: from 3.50% to 3.48%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 4.36% to 4.35%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.83% to 1.81%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 7.33% to 7.38%.
- By stage, 9.8% of total loans in forbearance are in the initial forbearance plan stage, while 83.2% are in a forbearance extension. The remaining 7.0% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.03% to 0.04%.
- Of the cumulative forbearance exits for the period from June 1, 2020, through July 18, 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.
- 13.4% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 10.8% 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 increased relative to the prior week: from 6.4% to 7.8%.
- Average speed to answer decreased from 2.0 minutes to 1.1 minutes.
- Abandonment rates decreased from 4.7% to 4.1%.
- Average call length decreased from 8.1 minutes to 7.7 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of July 18, 2021:
- Total: 3.48% (previous week: 3.50%)
- IMBs: 3.68% (previous week: 3.68%)
- Depositories: 3.61% (previous week: 3.62%)
