Residential Real Estate News
Mortgage Loans in Forbearance Dips to 3.23 Percent
According to the Mortgage Bankers Association's latest Forbearance and Call Volume Survey, the total number of U.S. mortgage loans now in forbearance decreased by 2 basis points from 3.25% of servicers' portfolio volume in the prior week to 3.23% as of August 29, 2021. According to MBA's estimate, 1.6 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 1.63%. Ginnie Mae loans in forbearance decreased 29 basis points to 3.63%, while the forbearance share for portfolio loans and private-label securities (PLS) increased 34 basis points to 7.52%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 1 basis point to 3.49%, and the percentage of loans in forbearance for depository servicers decreased 2 basis points to 3.33%.
"The share of loans in forbearance decreased by two basis points last week, with both new requests and exits remaining at a slow pace as we reached the end of August," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "There was another large shift in the location of many FHA and VA loans, which have been bought out of Ginnie Mae pools and moved onto servicer balance sheets. As a result, there was a sharp drop in the share of Ginnie Mae loans in forbearance, and an offsetting increase in the share of portfolio loans in forbearance. These buyouts enable servicers to stop advancing principal and interest payments, and work with borrowers to begin paying again before they are re-securitized into Ginnie Mae pools."
Key Report Findings Include:
- Total loans in forbearance decreased by 2 basis points relative to the prior week: from 3.25% to 3.23%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 3.92% to 3.63%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.66% to 1.63%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 7.18% to 7.52%.
- By stage, 10.6% of total loans in forbearance are in the initial forbearance plan stage, while 81.2% are in a forbearance extension. The remaining 8.2% 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 August 29, 2021, at the time of forbearance exit:
- 28.4% resulted in a loan deferral/partial claim.
- 22.4% represented borrowers who continued to make their monthly payments during their forbearance period.
- 15.9% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 13.0% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 11.4% 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 1.4% 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 6.3% to 5.8%.
- Average speed to answer decreased from 1.2 minutes to 1.0 minutes.
- Abandonment rates decreased from 3.8% to 3.3%.
- Average call length increased from 8.0 minutes to 8.1 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of August 29, 2021:
- Total: 3.23% (previous week: 3.25%)
- IMBs: 3.49% (previous week: 3.50%)
- Depositories: 3.33% (previous week: 3.35%)
