Sunday, 7 March 2021 | The Latest Buzz for the Appraisal Industry

Forbearance Requests Rise for Portfolio/PLS Loans, Drop for GSEs

As of January 17, the total number of loans in forbearance totaled 5.38%, representing a small increase from 5.37% the week prior, according to the Mortgage Bankers Association’s most recent Forbearance and Call Volume Survey.

The MBA notes that 2.7 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.11% – a 2-basis-point improvement. Ginnie Mae loans in forbearance decreased 6 basis points to 7.61%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 26 basis points to 8.94%.

The percentage of loans in forbearance for independent mortgage bank (IMB) servicers remained unchanged relative to the prior week at 5.79%, and the percentage of loans in forbearance for depository servicers increased 3 basis points to 5.36%.

“The small increase in the share of loans in forbearance was led by a gain in the portfolio/PLS loan segment,” says Mike Fratantoni, MBA’s senior vice president and chief economist. “The good news is that the forbearance numbers for GSE loans continues to decline more consistently, as these borrowers typically have stronger credit and more stable employment.”

The MBA notes that borrowers exited forbearance at a slower rate relative to earlier weeks, while the rate of new requests has stayed at a steady, low level.

“The latest housing market data show strong momentum entering 2021, with both the pace of home sales and new construction booming,” he adds. “We expect that this strong market could benefit homeowners who need to sell their home, as record-low inventory is causing for-sale homes to go under contract quickly and is pushing up home prices.”

By stage, 18.17% of total loans in forbearance are in the initial forbearance plan stage, while 79.31% are in a forbearance extension. The remaining 2.52% are forbearance re-entries. Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior two weeks, at 0.07%.

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