Residential Real Estate News
Mortgage Loans in Forbearance Decreases to 4.5 Percent in U.S.
Based on the Mortgage Bankers Association's latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 16 basis points from 4.66% of servicers' portfolio volume in the prior week to 4.50% as of April 11, 2021. According to MBA's estimate, 2.3 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.44% - an 8-basis-point improvement. Ginnie Mae loans in forbearance decreased 17 basis points to 6.16%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 31 basis points to 8.34%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 17 basis points to 4.72%, and the percentage of loans in forbearance for depository servicers declined 13 basis points to 4.67%.
"The share of loans in forbearance decreased for the seventh straight week and has now dropped 40 basis points in the last two weeks. The forbearance share decreased for all three investor categories, with the rate for portfolio and PLS loans decreasing by 31 basis points this past week - the largest drop across investor categories," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "Forbearance exits increased for portfolio and PLS loans but decreased for GSE and Ginnie Mae loans. More than 36 percent of borrowers in forbearance extensions have now exceeded the 12-month mark."
Fratantoni added, "Economic data on home construction and consumer spending in March show a strong housing market and a quickened pace of economic activity. Combined with the homeowner assistance and stimulus payments that many households are receiving, we expect that the forbearance numbers will continue to decline in the months ahead as more individuals regain employment. Homeowners who are still facing hardships and need to extend their forbearance term should contact their servicers."
Key Report Findings Include:
- Total loans in forbearance decreased by 16 basis points relative to the prior week: from 4.66% to 4.50%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 6.33% to 6.16%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 2.52% to 2.44%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 8.65% to 8.34%.
- By stage, 13.1% of total loans in forbearance are in the initial forbearance plan stage, while 82.1% are in a forbearance extension. The remaining 4.8% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained flat relative to the prior week at 0.05%.
- Of the cumulative forbearance exits for the period from June 1, 2020, through April 11, 2021:
- 26.7% resulted in a loan deferral/partial claim.
- 25.6% represented borrowers who continued to make their monthly payments during their forbearance period.
- 14.6% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 14.5% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 9.5% 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 1.6% 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 8.5% to 7.9%.
- Average speed to answer decreased from 1.8 minutes to 1.4 minutes.
- Abandonment rates decreased from 4.9% to 4.6%.
- Average call length remained flat at 8.0 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of April 11, 2021:
- Total: 4.50% (previous week: 4.66%)
- IMBs: 4.72% (previous week: 4.89%)
- Depositories: 4.67% (previous week: 4.80%)
