Residential Real Estate News
Mortgage Loans in Forbearance Dip to 5.2 Percent
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 3 basis points from 5.23% of servicers' portfolio volume in the prior week to 5.20% as of February 28, 2021. According to MBA's estimate, 2.6 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.94% - a 3-basis-point improvement. Ginnie Mae loans in forbearance decreased 7 basis points to 7.28%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 2 basis points to 9.05%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 6 basis points to 5.51%, and the percentage of loans in forbearance for depository servicers decreased 1 basis point to 5.28%.
"There was a small decline in the total share of loans in forbearance in the last week of February, as the pace of forbearance exits increased. This continues the trend reported in prior months. Of those homeowners in forbearance, more than 12 percent were current at the end of February, down from the almost 14 percent at the end of January," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "The improving economy, the soon-to-be passed stimulus package, and the many homeowners in forbearance reaching the 12-month mark of their plan could all influence the overall forbearance share in the coming months."
Fratantoni added, "Job growth picked up sharply in February and the unemployment rate decreased, but there are still almost 10 million people unemployed, with 4.1 million among the long-term unemployed - up 125,000 from January. The passage of the American Rescue Plan provides needed support for homeowners who are continuing to struggle during these challenging times."
Key findings of MBA's Forbearance and Call Volume Survey:
- Total loans in forbearance decreased by 3 basis points relative to the prior week: from 5.23% to 5.20%.
By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 7.35% to 7.28%. - The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.97% to 2.94%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 9.03% to 9.05%.
- By stage, 14.6% of total loans in forbearance are in the initial forbearance plan stage, while 82.8% are in a forbearance extension. The remaining 2.6% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.07%.
- Of the cumulative forbearance exits for the period from June 1, 2020, through February 28, 2021:
27.7% represented borrowers who continued to make their monthly payments during their forbearance period. - 25.8% resulted in a loan deferral/partial claim.
- 15.2% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 13.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 8.0% resulted in a loan modification or trial loan modification.
- 7.6% resulted in loans paid off through either a refinance or by selling the home.
- The remaining 1.8% 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 from the previous week from 7.9% to 8.7%.
- Average speed to answer decreased from 3.0 minutes to 2.6 minutes.
- Abandonment rates decreased from 7.6% to 6.1%.
- Average call length decreased from 8.2 minutes to 8.1 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of February 28, 2021:
- Total: 5.20% (previous week: 5.23%)
- IMBs: 5.51% (previous week: 5.57%)
- Depositories: 5.28% (previous week: 5.29%)
