Residential Real Estate News
Mortgage Loans in Forbearance Dips to 4.16 Percent in U.S.
The Mortgage Bankers Association estimates there are 2.1 million homeowners in forbearance plans at the end of May 2021.
The Mortgage Bankers Association latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 2 basis points from 4.18% of servicers' portfolio volume in the prior week to 4.16% as of May 30, 2021.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 1 basis point to 2.18%. Ginnie Mae loans in forbearance decreased 1 basis points to 5.54%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased 6 basis points to 8.31%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 2 basis points to 4.34%, and the percentage of loans in forbearance for depository servicers decreased 1 basis point to 4.33%.
"The share of loans in forbearance declined for the 14th straight week, with small drops across most investor types and all servicer types," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "Forbearance exits dropped to 6 basis points, the lowest weekly level since mid-February, but new forbearance requests, at 4 basis points, matched the recent weekly low from early May."
Added Fratantoni, "Although the headline employment growth number for May was lower than many had anticipated, other data show evidence of a strengthening job market. That is good news for homeowners who have been struggling and are looking for work, as more families can regain their incomes and start making their mortgage payments again."
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 4.18% to 4.16%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 5.55% to 5.54%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.19% to 2.18%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.37% to 8.31%.
- By stage, 11.1% of total loans in forbearance are in the initial forbearance plan stage, while 83.2% are in a forbearance extension. The remaining 5.7% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.05% to 0.04%.
- Of the cumulative forbearance exits for the period from June 1, 2020, through May 30, 2021:
- 27.4% resulted in a loan deferral/partial claim.
- 24.6% 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.
- 14.0% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 10.0% 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 stayed the same relative to the previous week at 6.5%.
- Average speed to answer decreased from 1.3 minutes to 1.2 minutes.
- Abandonment rates decreased from 4.1% to 3.8%.
- Average call length rose from 7.7 minutes to 7.8 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of May 30, 2021:
- Total: 4.16% (previous week: 4.18%)
- IMBs: 4.34% (previous week: 4.36%)
- Depositories: 4.33% (previous week: 4.34%)
