Residential Real Estate News
2.1 Million U.S. Homeowners Still in Mortgage Forbearance Plans in May
Mortgage Loans in Forbearance Dips to 4.18 Percent
According to the Mortgage Bankers Association's latest Forbearance and Call Volume Survey, the total number of U.S. loans now in forbearance decreased by 1 basis point from 4.19% of servicers' portfolio volume in the prior week to 4.18% as of May 23, 2021. According to MBA's estimate, 2.1 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 2.19%. Ginnie Mae loans in forbearance decreased 4 basis points to 5.55%, while the forbearance share for portfolio loans and private-label securities (PLS) increased 11 basis points to 8.37%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 2 basis points to 4.36%, and the percentage of loans in forbearance for depository servicers declined 1 basis point to 4.34%.
"The share of loans in forbearance slightly declined, dropping by only 1 basis point, due to a slower pace of forbearance exits. This was the 13th straight week of declines," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "Forbearance re-entries increased to almost 5.6 percent, as more homeowners who had canceled forbearance needed assistance again. There was also an increase in the share of PLS and portfolio loans in forbearance, while the share for Fannie Mae, Freddie Mac, and Ginnie Mae loans decreased."
Added Fratantoni, "Housing market data continue to paint a picture of strong demand and constrained supply. The resulting rapid growth in home equity will benefit homeowners, whether they choose to retain or sell their properties."
Key findings of MBA's Forbearance and Call Volume Survey:
- Total loans in forbearance decreased by 1 basis point relative to the prior week: from 4.19% to 4.18%.
By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 5.59% to 5.55%. - The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.21% to 2.19%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.26% to 8.37%.
- By stage, 11.6% of total loans in forbearance are in the initial forbearance plan stage, while 82.8% are in a forbearance extension. The remaining 5.6% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.05%.
- Of the cumulative forbearance exits for the period from June 1, 2020, through May 23, 2021:
27.3% resulted in a loan deferral/partial claim. - 24.7% represented borrowers who continued to make their monthly payments during their forbearance period.
- 15.0% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 14.1% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 9.9% resulted in a loan modification or trial loan modification.
- 7.5% 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 from the previous week from 8.4% to 6.5%.
- Average speed to answer decreased from 1.7 minutes to 1.3 minutes.
- Abandonment rates decreased from 5.2% to 4.1%.
- Average call length remained the same at 7.7 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of May 23, 2021:
- Total: 4.18% (previous week: 4.19%)
- IMBs: 4.36% (previous week: 4.38%)
- Depositories: 4.34% (previous week: 4.35%)
