Wednesday , 6 January 2021

MBA: 2.7 Million Homeowners Still in Forbearance Plans

According to the Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey for the week ending November 15, 2.7 million homeowners are in forbearance plans, representing 5.48% of servicers’ portfolio volume.

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 24th week in a row, to 3.35%. Ginnie Mae loans in forbearance increased three basis points, to 7.73%, and the forbearance share for portfolio loans and private-label securities (PLS) increased by 10 basis points, to 8.48%.

The percentage of loans in forbearance for independent mortgage bank (IMB) servicers remained the same as the previous week, at 5.94%, and the percentage of loans in forbearance for depository servicers increased one basis point from the previous week, to 5.44%. 

“A marked slowdown in forbearance exits, as well as a slight rise in the share of Ginnie Mae, portfolio, and PLS loans in forbearance, led to an overall increase for the first time since early June,” says Mike Fratantoni, MBA’s senior vice president and chief economist. “The decline in exits in the prior week follows a flurry of them last month, when many borrowers reached the six-month point in their forbearance terms.”

By stage, 21.32% of total loans in forbearance are in the initial forbearance plan stage, while 76.76% are in a forbearance extension. The remaining 1.92% are forbearance re-entries.

Total weekly forbearance requests as a percentage of servicing portfolio volume (#) increased relative to the prior week: from 0.08% to 0.09%.

Of the cumulative forbearance exits for the period from June 1 through Nov. 15, 30.5% represented borrowers who continued to make their monthly payments during their forbearance period; 24.0% resulted in a loan deferral/partial claim; 16.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance; and 12.9% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.

Also, 7.1% resulted in loans paid off through either a refinance or by selling the home, 6.8% resulted in a loan modification, and the remaining 1.9% resulted in repayment plans, short sales, deeds-in-lieu or other reasons.

Going forward, Fratantoni suggests there is still reason to be concerned.

“Renewed weakness in the latest job market data indicate that many homeowners are continuing to experience severe hardships due to the pandemic and still need the support that forbearance provides,” he says.

Photo: Mike Fratantoni

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